TIDMLEAF
RNS Number : 9397Q
Leaf Clean Energy Company
13 November 2012
13 November 2012
Leaf Clean Energy Company
Results for the year ended 30 June 2012
The Board of Leaf Clean Energy Company ("Leaf" or "the Company")
are pleased to announce the Company's results for the year ended 30
June 2012.
Highlights of the year are:
-- NAV per share for the Leaf portfolio was 141.22 cents or
90.03 pence at US$1.5685 to the GBP1 (2011: 165.60 cents).
-- Leaf made an additional US$7.6 million of direct equity and
debt investments into existing portfolio businesses.
-- The Company received cash payments of accrued and current
interest and repayments of principal on loans to its investee
companies totalling US$5.1 million and US$15.5 million
respectively.
-- The Company earned US$1.8 million of interest income from
debt investments in the portfolio companies. This income has been
recorded in the intermediate holding companies and included in the
assessment of valuations for the relevant subsidiaries.
-- The Company repurchased 3.9 million shares at an average
price of 77.98 pence, taking advantage of weakness in the Company's
share price to deliver value to shareholders.
For further information, please contact:
Bran Keogh +1-202-289-7881
Leaf Clean Energy Company
Ivonne Cantu +44 (0) 207 397 8900
Cenkos Securities plc
Chairman's Statement
I am pleased to report on the progress made by Leaf Clean Energy
Company ("Leaf" or the "Company") for the year ended 30 June
2012.
Three years ago we made three key structural changes to deal
with the impact on the private equity market of a global
contraction, which continues to hamper a return to the targeted
gains we came to expect during the mid-2000s:
-- We replaced our asset advisor with experienced professionals
who could partner with our portfolio company management teams to
help them navigate toward growth; we also replaced the operational
teams in several of our active investments with more experienced
asset managers and O&M operators;
-- We employed rigorous methods to identify opportunities in
areas where others are not focused, such as companies trading at a
steep discount or where experienced management teams are in place
and growth equity is needed to scale up proven concepts; and
-- We assumed the worst and husbanded our resources to ensure
that we could ride out a very difficult and sustained downturn.
Now the focus of the directors and the Leaf management team is
to continue to support our portfolio companies and realise the
investments when opportune to maximise returns to our
shareholders.
Portfolio update
Cumulative public market forces and near-term growth concerns in
our industry resulted in generally lower valuations, most
prominently in the wind and solar PV sub-sectors. We were therefore
rigorous in reflecting mark-to-market values in line with relevant
investment barometers in the sector. Although our aggregate NAV
consequently decreased, the great majority of Leaf's portfolio
companies continued to hit their milestones and several delivered
on value creation initiatives put in place since our last annual
report, reflecting our successful strategy of actively partnering
with management.
Johnstown Regional Energy, LLC ("JRE") secured long-term
contracts to sell its reclaimed landfill gas production to buyers
in California, commanding premium prices due to the fuel's green
attributes. Leaf's management team and board members worked closely
with JRE's operators to put the company in a considerably more
favorable economic position while natural gas prices remain low for
the foreseeable future.
Multitrade Telogia, LLC, one of the company's biomass generation
assets, performed above expectations from an operational
standpoint, benefiting from the experienced operators and asset
managers we had earlier put in place.
Evidence of our ability to be rigorous and opportunistic in our
acquisition strategy came shortly after the end of the reporting
period with our investment in Atlanta-based Lehigh Technologies,
Inc. ("Lehigh"). Lehigh's proprietary technology transforms
end-of-life tires and post-industrial rubber into new materials
that are incorporated into high-performance tires, consumer and
industrial plastics goods, asphalt and coatings and construction
materials. This investment further diversifies our portfolio and
reduces our exposure to natural gas prices and government
incentives. Lehigh has a seasoned management team with which we are
partnering closely, delivering solid sales to tire manufacturers
and operating in a number of other very promising vertical
markets.
SkyFuel, Inc. ("SkyFuel") is an excellent example of the way in
which we are conserving our resources and planning for the long
term. During the year SkyFuel sold, shipped and delivered on its
first large-scale commercial project with a large European power
company. It also became the first company in the concentrated solar
power (CSP) industry to offer insurance to support the company's
product warranties through a first-of-its-kind performance
guarantee from Munich Re, a multinational reinsurance company. As a
result of Leaf's successful partnership with management and
additional financial support, SkyFuel is now one of the few
remaining standalone CSP technology providers, with a strongly
growing pipeline.
In summary, I am pleased to say that many of the portfolio's
operational assets have now been de-risked and optimized for
further performance improvements, positioning them for continued
growth as our diverse portfolio matures.
Economic and political background
The past year saw continued global equity market volatility and
clean energy sector underperformance. Factors contributing to the
volatile investment climate included the lingering European
sovereign debt crisis, investment concerns over sustained global
growth and mixed economic indicators from two of the world's
largest economies, the United States and China.
The clean energy sector saw significant challenges over the
period, including high-profile solar bankruptcies in North America
and Europe and workforce reductions in some of the world's largest
wind turbine manufacturers. These events all took place under
intense public scrutiny, leading to scepticism amongst media
outlets, conservative political leaders and the public at large
about the long-term viability of renewables as a supplement to
traditional fossil fuels and about the US government's decision to
use taxpayer-funded incentives to support a struggling industry.
This fallout may continue in the short term, further exacerbating
the current trade tensions between China and Western economies,
with lasting implications for investors.
Despite these political headwinds, the re-election of President
Obama and the positive remarks he made during the State of the
Union Address in the early part of 2012, as well as his remarks and
those of Governor Cuomo and Mayor Bloomberg of New York regarding
increased severe weather and its relationship to climate change,
assured us that the renewable energy sector will continue to be a
growing part of the US's energy future. To date, this has rung true
and the next four years may see renewed focus in the sector.
According to Bloomberg New Energy Finance, total installed
renewable energy generation capacity in the US grew by 21% over the
past year, providing approximately 12% of the nation's energy
supply. Furthermore, between the first quarter of 2011 and the
first quarter of 2012 US installed capacity from wind and solar
power generation increased by 17% and 85% respectively.
Key drivers of installed capacity growth have been the
Production and Investment Tax Credits (PTC and ITC) and the
precipitous decline in costs of key renewable technologies, most
notably solar PV and wind. According to the Solar Energy Industry
Association (SEIA), the average price of a solar panel has declined
by 47% since the beginning of 2011. Onshore wind costs have fallen
by 15% over the same period. These continued cost declines have led
to wind and solar PV energy prices coming within striking distance
of conventional fossil-fuel alternatives in many parts of the US.
However, government support through subsidies or tax credits is
expected to be curtailed over the coming years, which undoubtedly
reduces the economic incentives for developers of renewable energy
sources to construct projects at the current pace.
In a separate development, the past year saw natural gas match
coal as a primary fuel source for US power generation for the first
time since the government started collecting data in 1977.
According to the Energy Information Agency (EIA), natural-gas-fired
plants provided 33% of US generation, compared to coal's 34% share.
In 2009, natural gas accounted for 23% of US generation, while coal
provided 45%. This historic shift is largely due to the
unprecedented discovery of large shale gas reserves and stricter
environmental controls around emissions for the aging coal fleet in
the US.
Sector performance
The public renewable energy market faced significant challenges
as governments in the developed economies pared back investment
subsidies, consumers enjoyed access to historically low natural gas
prices and investor confidence in the broader sector remained
depressed. These factors, coupled with the continued challenge of
accessing finance for renewable projects, trade tensions between
the US and China and negative political sentiment in the US, led to
disappointing headline performance for the year relative to other
markets. The WilderHill New Energy Global Innovation Index (NEX),
which tracks 96 large clean energy stocks worldwide, has
underperformed the S&P 500 by 19% so far this year, hitting a
nine-year low in the first quarter of 2012.
Global private equity and venture capital renewable energy
investment echoed similar trends in 2012, down from a record 2011.
Investment in the first half of 2012 fell 16% to $3.6bn from $4.3bn
in 2011. Despite this decline in private investment over the past
year, large investments continue to reflect the importance and
value-creation opportunities of addressing energy and sustainable
solutions both domestically and internationally.
As the renewable energy industry continues to mature and the
weaker players exit the stage, I believe the sector will emerge
strengthened as sustainable business models become essential.
Outlook
Despite the underperformance of the sector over the past year,
the large majority of Leaf's portfolio companies are progressing as
expected against their business plans. I believe the team's
determination and focus have preserved capital in an unstable
environment. As the market recovers, the value creation initiatives
put in place will position Leaf to deliver significantly improved
shareholder value.
We believe that the long-term fundamentals of the clean energy
sector remain strong and, as private market investors, we believe
that valuations for maturing private companies are at an attractive
level. The current environment is also conducive to making
investments in lean companies that have exhibited strong
fundamentals and continued resilience in a challenging
environment.
Our priorities in the current year are to remain focused on
partnering with our portfolio companies to deliver further
operational improvements, whilst carefully husbanding our
resources.
The Annual Report and Accounts set out below incorporate both
financial statements for the Company and consolidated financial
statements for the wider Leaf Group. References to NAV in my report
and the Management Report reflect the Company's NAV.
Net assets
For the year ended 30 June 2012, Leaf's net asset value (NAV)
per share decreased by 14.7 percent, from 165.60 cents to 141.22
cents. Of Leaf's US$182 million of net assets, US$42 million was
held in cash. The Board is of the view that this balance provides
sufficient liquidity to meet the continuing needs of the
portfolio.
(1) Based on US$/GBP exchange rate of 1.5685 on 30 June 2012
MANAGEMENT REPORT
During the year ended 30 June 2012 the clean energy investment
markets faced continued uncertainty and delays to company
realizations, largely due to global economic and political
conditions, as described below in the "Market Environment" section.
The WilderHill New Energy Global Innovation Index (NEX) of
publicly-quoted renewable energy companies has lost more than 75%
of its value since its high point in December 2007, and is down 44%
in the year ended 30 June 2012. In the US, abundant and low-cost
shale gas has been a game-changer for renewable and non-renewable
energy alike, and is a major cause of the significant and sustained
collapse in power prices in the US over the past five years, as
natural gas is now setting the marginal price of power.
Nonetheless, certain sub-sectors of the investment markets offer
compelling investment opportunities, especially those that are not
dependent on government incentives and those in geographies with
high electricity prices.
The Board and management of Leaf continued to support and grow
Leaf's existing portfolio to ensure that its investee companies are
well-positioned as the market improves. Selected highlights are as
follows (with further details given in the "Portfolio Overview"
section at the end of this report).
-- SkyFuel, Inc. (SkyFuel), a leading concentrated solar
equipment provider, achieved the first third-party warranty
coverage in the CSP sub-sector. Following more than a year of
extensive due diligence on SkyFuel's products, Munich Re, a leading
worldwide reinsurance company, agreed to underwrite insurance for
SkyFuel's product warranties. These warranties guarantee the
thermal output of SkyFuel's SkyTrough system for five years and the
specular reflectance of the SkyTrough reflectors for 20 years.
SkyFuel's ability to offer innovative and capital-efficient
insurance backing in support of its equipment sales provides a
distinct advantage in a market that is reliant on risk-averse
lenders for project finance.
-- Johnstown Regional Energy, LLC (JRE), a large landfill gas
reclamation company, negotiated and entered into long-term
fixed-price contracts to sell its green biogas to buyers in
California. The California market provides an appropriate price
incentive for green gas and will partially offset the unfavourable
impact on JRE of the dramatic drop in natural gas prices resulting
from the development of shale gas.
-- Invenergy Wind LLC (Invenergy), the largest independent wind
developer in the US, closed a $200 million long-term loan financing
and closed project financing for six wind projects. During the
period, five of these projects finished construction and commenced
commercial operations. In addition, Invenergy completed
construction and began commercial operations at its previously
financed 138.6 MW Le Plateau Wind Energy Centre in Quebec. Finally,
Invenergy completed the sale of its 81 MW Bishop Hill II wind
project in Henry County, Illinois to MidAmerican Renewables,
capping off a productive year for the company.
-- Certain sub-sectors of the broader clean energy and
sustainable investment market have provided opportunities for
attractive investment and portfolio diversification. The Leaf Board
and management reviewed hundreds of new opportunities during the
year and were pleased to announce in July 2012 that Leaf has led an
investment round in Lehigh Technologies, Inc. ("Lehigh"). The
investment in Lehigh closed on 20 July 2012, after the end of the
current reporting period.
Lehigh is a leading sustainable materials manufacturer whose
proprietary, cryogenic turbo mill technology turns end-of-life and
post-industrial rubber material into sustainable chemical additives
that are used in a wide range of industrial and consumer
applications. Lehigh's micronized rubber powder ("MRP") products
help customers lower their consumption of oil-derived and energy
intensive materials. Its MRPs lower costs, increase the
sustainability profile of end products, and deliver performance
without sacrificing the reliability offered by traditional raw
materials. Lehigh is a late-stage venture-backed company with a
growing revenue stream.
Prior to Lehigh, only a few outlets for end-of-life material
existed, with it being incinerated, sent to landfills, or reused in
lower-value applications. Lehigh addresses these environmental
challenges for millions of pounds of material each year, all the
while saving customers money and reducing the energy-intensity of
its customers' raw materials. This is a disruptive technology, a
high-growth company, and is led by a top-tier management team.
Lehigh also further diversifies Leaf's investment portfolio.
Financial Performance
Leaf's total NAV on 30 June 2012 was US$182 million, US$38
million lower than the NAV at 30 June 2011. The change in NAV over
the annual report period resulted mainly from the US$27.2 million
unrealized loss on revaluation of the Company's investments,
operating expenses of US$5.9 million, and $4.8 million of share
repurchases. US$42 million of the Company's NAV was held in cash
and US$143 million in investments.
NAV per share for the Leaf portfolio was 141.22 cents or 90.04
pence at US$1.5685 to the GBP1. This was a decrease of 14.7 percent
for the one year period from 30 June 2011. The decrease for the one
year period was due primarily to the unrealised loss on revaluation
of the Company's investments (-12.8%) and operating expenses for
the period (-2.7%), offset by share repurchases (+0.8%).
For the period under review, there were several other noteworthy
events:
-- Leaf made an additional US$7.6 million of direct equity and
debt investments in existing portfolio businesses;
-- The Company earned US$1.8 million of interest income from
debt investments in the portfolio companies during the period. This
income has been recorded in the accounts of the intermediate
holding companies and included in the assessment of valuations for
the relevant subsidiaries;
-- Leaf repurchased 3.9 million shares at an average price of
77.98 pence, taking advantage of the weakness in the Company's
share price to deliver value to shareholders; and
-- The Company received cash payments of accrued and current
interest and repayments of principal on loans to its investee
companies totalling US$5.1 million and US$15.5 million
respectively.
Market Environment
The four quarters ended 30 June 2012 witnessed a pull-back in
the global recovery in clean energy investing that had been
underway during 2010 and 2011. This contraction was due to the
combination of continued global economic problems and interrelated
political developments in the US and Europe. The continuing
sovereign debt crisis has brought austerity measures and credit
tightening into play across Europe. The increasing polarisation of
the US Congress, exacerbated by presidential election year
politics, has made it difficult, if not impossible, for it to
address long-term structural issues in the US federal budget. These
factors, combined with the impact of abundant and low-cost shale
gas in the US, have had a dampening effect on policy support for
clean energy in these geographies. Another clear impact of these
global economic issues for the sector and for Leaf's portfolio
companies has been that it has become much more difficult for clean
energy companies to raise new capital.
Ironically, the resulting weakening and increased uncertainty
about the continuation and extent of government renewable energy
subsidies in Europe and the US has come about just as several
renewable energy technologies are approaching, but have not yet
quite attained, grid parity versus the fossil fuels against which
they compete. A main goal of government subsidisation of renewable
energy has been to enable sustainably profitable business models in
order to encourage the private investment in capacity and
technology required to achieve grid parity with fossil fuels.
The current pull-back in subsidisation has pulled the carpet out
from under many who invested on that premise. The end result may be
that the timing of grid parity will be delayed and may require even
greater subsidisation to reach this goal than would otherwise have
been required had governments stayed the course.
In the case of solar PV, the remarkable progress towards grid
parity has come at the expense of many of the early-stage and
established US and European players in this market. Manufacturers
of solar PV panels have continued to experience a brutal pricing
environment due to global over-capacity and competition from Asian
panel manufacturers who have been accused by US and European firms
of pricing below cost in US and European markets. This resulted in
the application by the US in March 2012 of countervailing duties on
Chinese solar panels and in May 2012 of countervailing duties and
anti-dumping duties on Chinese wind towers and solar panels.
By the end of the current reporting period, massive
over-capacity and cutthroat pricing in the solar PV market had
resulted in the bankruptcies of an additional 13 solar PV panel
manufacturers, in the wake of the high-profile bankruptcy of
early-stage Solyndra in August 2011. These bankruptcies included
several established manufacturers such as Q-Cells, Evergreen Solar
and Solon, while many other PV manufacturers have had to cut jobs
and reduce production to conserve cash. As expected, the severe
depression of public market prices for solar PV panel manufacturers
resulting from this environment has brought about a wave of
consolidation M&A activity.
For the year ending 30 June 2012, global investment by venture
capital ("VC") and private equity ("PE") firms in clean energy was
US$7.5 billion, which was flat compared to the previous year ended
30 June 2011. For the latest quarter ending 30 June 2012,
investment was down 28% from the previous calendar quarter and down
39% from the prior-year quarter.
In calendar year 2011 solar was the most popular sector for
VC/PE investment, with 30% of the US$2.4 billion of total solar
investment directed to crystalline PV and the remainder invested in
solar thermal, thin film and service and support. A total of US$367
million was invested by VC/PE in solar thermal.
Global acquisition activity in renewable energy was up
year-on-year by 10.5% and 12.1% in dollar terms, respectively, for
calendar year 2011 and the year ended 30 June 2012. For calendar
year 2011, activity in the US was down by 22%, while in Europe it
was up 34%. Two European deals dominated: the US$7.9 billion buyout
by EDF of the remaining 50% of EDF Energies Nouvelles it did not
own and the US$2.1 billion buyout by Iberdrola of the remaining 20%
of Iberdrola Renovables it did not own. Without these two large
re-acquisitions of corporate spin-offs by their parents - deals
that perhaps indicate the parents' view that public market prices
in wind and solar are at irrationally low levels - European
acquisitions would have been down 4%.
In the public markets, new raises from renewable energy IPOs
were down 15% and 77% on a global basis in dollar terms for
calendar year 2011 and the year ended 30 June 2012 respectively.
The activity during both periods was dominated by solar, wind and
China. Macroeconomic and political pressures depressed prices of
existing public renewable energy companies, as measured by the NEX
index, which fell 40% and 44%, for calendar year 2011 and the year
ended 30 June 2012, respectively, as compared to the S&P 500,
which was flat for calendar year 2011 and increased by 1.7% during
the four quarters ended 30 June 2012. This decline in public market
valuations for renewable energy companies has continued to put
pressure on private company valuations, including the prices for
many businesses comparable or related to Leaf's portfolio
companies.
Outlook
While the short-term data are unfavourable, the long-term
drivers for increased adoption of renewable energy in North America
remain strong. These long-term drivers include the underlying trend
of rising fossil-fuel costs, the need to find new industrial
sources of economic growth and job creation, the desire to achieve
energy independence and to maintain global competitiveness,
increasing global demand for energy, and the need to address
climate change issues. Collectively, these factors provide evidence
that the NEX is in an oversold position. Public and private
valuations are attractive to buyers in many cases and have created
opportunities for discerning investors such as Leaf who are in a
position to identify and capture this value.
Given the increase in the expected length of time to liquidity
events for its existing portfolio companies as a result of the
current state of the global economy, Leaf has continued to focus in
the short term on the management of its existing portfolio, having
prudently maintained sufficient cash to provide appropriate
financing for its portfolio.
Portfolio Overview
A. Active Investments - Growth Companies
MaxWest Environmental Systems ("MaxWest") Waste-to-energy
gasification
Investment: US$23.8mm Ownership: Significant Stake
------------------------------------------ ------------------------------------------------------------------------
Company Summary Recent Highlights
MaxWest designs, builds, owns * Completed the next-generation version of the
and operates waste-to-energy proprietary MaxWest gasification technology and
gasification facilities specifically successfully installed it at the Sanford site
applied to waste water facilities.
MaxWest plants can be "bolted-on"
to existing water treatment facilities, * Highlighted at the Clinton Global Initiative's (CGI)
providing municipalities and Seventh Annual Meeting in New York City for its
industrial sites with a cost-effective, Commitment to Action, "Landfill Reduction through
environmentally friendly alternative Biosolids Processing", which noted its exemplary
to traditional methods of waste approach to addressing challenges in environment and
disposal. energy
www.maxwestenergy.com
------------------------------------------ ------------------------------------------------------------------------
SkyFuel Inc. ("SkyFuel") Concentrated Solar Power
Investment: US$28.3mm Ownership: Significant stake
------------------------------------------------------------------- ----------------------------------------------------------------------
Company Summary Recent Highlights
SkyFuel was founded in 2007 and
is an emerging technology leader * Became first in the CSP industry to offer insurance
in the solar thermal power equipment to support the company's product warranties,
sector. underwritten by one of the world's leading
reinsurance companies, Munich Re
SkyFuel is one of the few remaining
stand-alone concentrated solar
power ("CSP") technology providers.
* Secured a large-scale domestic commercial order
SkyFuel possesses proprietary
and patented technologies which
provide a meaningful cost advantage
relative to its competitors:
* SkyTrough(R) - an advanced, low-cost, accurate
parabolic trough based on ReflecTech(R), and
* ReflecTech(R) Mirror Film - a shatterproof glass
alternative www.skyfuel.com/#/NEWS/
www.skyfuel.com
------------------------------------------------------------------- ----------------------------------------------------------------------
B. Active Investments - Projects
Johnstown Regional Energy, LLC ("JRE") Landfill Gas
Investment: US$33mm Ownership: Wholly owned
-------------------------------------- ------------------------------------------------------------------------
Company Summary Recent Highlights
JRE owns and operates three high-Btu * Entered into long-term, fixed-price contracts to sell
landfill gas-to-methane projects JRE's green gas to California buyers
in Pennsylvania.
JRE extracts raw landfill gas
that is subsequently cleaned * Currently selling 100% of JRE's gas to buyers in
in advanced technology processing California
plants and sold to utility gas
providers via connecting pipelines
as an alternative to fossil-based
natural gas.
This high quality "green" gas
ultimately displaces the use
of fossil-fuel-based natural
gas, making it eligible for premium
pricing in states which have
renewable protocol standards
(RPSs) incorporating reclaimed
landfill gas.
www.jreenergy.com
-------------------------------------- ------------------------------------------------------------------------
Multitrade Rabun Gap ("Rabun Gap") Wood-fuelled biomass
Investment: US$11.4mm Ownership: Majority
------------------------------------- -----------------------------------------------------------------------
Company Summary Recent Highlights
Rabun Gap is a 20 MW capacity * O&M management firm has completed operational
wood-fuelled bio-mass facility improvement plans which have decreased burn rate and
in Georgia. increased output
Rabun Gap utilises renewable
fuel from the local forest industry
and sells power to a Georgia * Experiencing continued higher-than-expected fuel
co-operative under a long-term prices due to the US Department of Agriculture's
power purchase agreement. apparent decision to refocus its BCAP Program
------------------------------------- -----------------------------------------------------------------------
Multitrade Telogia ("Telogia") Wood-fuelled biomass
Investment: US$7.3mm Ownership: Majority
------------------------------------------ ------------------------------------------------------------------------
Company Summary Recent Highlights
Telogia is a 14 MW capacity wood-fuelled * Closed permanent financing via a USDA guaranteed loan
bio-mass facility in Telogia, from a commercial bank and repaid Leaf's outstanding
Florida. construction loan principal and interest
Telogia utilises renewable fuel
from the local forest industry
and sells power to a local co-operative * Experiencing higher-than-expected fuel prices due to
under a long-term power purchase the US Department of Agriculture's apparent decision
agreement. to refocus its BCAP Program
* Optimization of plant performance resulted in record
output and EBITDA for Telogia during the annual
reporting period
------------------------------------------ ------------------------------------------------------------------------
Vital Renewable Energy Company ("VREC") Biofuels - Ethanol
Investment: US$20.9mm Ownership: Significant stake
------------------------------------------- ----------------------------------------------------------------------
Company Summary Recent Highlights
VREC is a renewable energy company
focused on the development of * VREC pursuing industrial and agricultural expansion
sugar-cane-based ethanol facilities plans
and electricity generation in
Brazil, as well as related infrastructure
projects.
www.vrec.com.br
------------------------------------------- ----------------------------------------------------------------------
Energía Escalona ("Escalona") Hydro
Investment: US$8.6mm Ownership: Majority
------------------------------------- -----------------------------------------------------------------------
Company Summary Recent Highlights
Escalona is a hydroelectric project * Escalona reached several development milestones in
development company based in the past fiscal year, including permitting approval
Mexico City. The company's flagship from the Mexican archaeological authority and
development is a 12 MW run-of-river approval of the final design and pathway
hydroelectric facility located
in Veracruz, Mexico.
* The Escalona project in Veracruz continues to be one
of the premier projects in Mexico given the large
pressure and steady water flows
------------------------------------- -----------------------------------------------------------------------
C. Passive Investments
Invenergy Wind LLC ("Invenergy") Wind Power
Investment: US$30.0mm Ownership: Minority
------------------------------------ ------------------------------------------------------------------
Company Summary Recent Highlights
The largest independently-owned * Completed construction and began commercial
wind energy developer in North operations at its 110 MW Gratiot County wind project
America, having put more than in Breckenridge, Michigan, for which it had obtained
3,000 MW into operation since equity financing from GE Energy Financial Services in
2004. October 2011
In addition to its large portfolio
of operating assets, Invenergy
also has a strong and diversified * Closed financing and commenced commercial operations
pipeline of 700 MW of wind power at three of the wind projects it owns with its
projects in advanced stages of partner, Enerco, with a combined capacity of 80 MW
development across North America located in northwest Poland
and Europe.
* Closed debt financing for its 200 MW California Ridge
www.invenergyllc.com wind project currently under construction in central
Illinois
* Completed construction and began commercial
operations at its 138.6 MW Le Plateau Wind Energy
Centre in Quebec
* Completed the sale of its 81 MW Bishop Hill II wind
project in Henry County, Illinois to MidAmerican
Renewables
* Closed a strongly oversubscribed $200 million
long-term loan financing
* Closed project financing for its 200 MW Bishop Hill
wind project in Henry County, Illinois
www.invenergyllc.com/news.html
------------------------------------ ------------------------------------------------------------------
Miasolé Solar PV
Investment: US$21.5mm Ownership: Minority
-------------------------------------------- -----------------------------------------------------------------------
Company Summary Recent Highlights
Miasolé develops and manufactures * Announced the achievement of a champion device
thin-film copper-indium-gallium-diselenide efficiency of 17.3% and that it is producing modules
(CIGS) solar photovoltaic cells. with 14% efficiency in commercial volumes
Miasolé's panels are designed
to be used in residential, commercial
and utility developments. * Strengthened its senior leadership, appointing a new
CEO, John Carrington and new president, Bob Baker,
Miasolé utilises a differentiated both former senior executives at First Solar and
vacuum deposition process that Intel
is highly efficient and designed
to apply CIGS material over large-area
substrates in a continuous fashion.
Miasolé is leveraging expertise
in semiconductor manufacturing
and a deep understanding of CIGS
material to manufacture new, www.miasole.com/pgs-news/overview.shtml
versatile and low-cost solar
products.
www.miasole.com
-------------------------------------------- -----------------------------------------------------------------------
12 November 2012
Parent company statement of comprehensive income
for the year ended 30 June 2012
Note Year ended Year ended
30 June 2012 30 June 2011
US$'000 US$'000
Interest income on cash
balances 7 65 48
Unrealised losses on revaluation
of investments at fair
value through profit or
loss 12.2 (27,261) (5,339)
Gain on restructuring of
subsidiary 11 3,381
Net foreign exchange gain
(loss) (8) 125
------------------------------------- ------- -------------- --------------
Gross portfolio return (27,204) (1,785)
------------------------------------- ------- -------------- --------------
Management service fees 8 (3,721) (3,776)
Other administration expenses 9 (2,214) (2,752)
------------------------------------- ------- -------------- --------------
Total expenses (5,935) (6,528)
Loss before taxation (33,139) (8,313)
Taxation 3.7 - -
------------------------------------- ------- -------------- --------------
Loss for the year and comprehensive
loss
for the year (33,139) (8,313)
===================================== ======= ============== ==============
Basic and diluted loss
per share (cents) 17 (25.35) (5.83)
===================================== ======= ============== ==============
The accompanying notes form an integral part of these financial
statements
Parent company statement of financial position
as at 30 June 2012
Note 30 June 2012 30 June 2011
US$'000 US$'000
Assets
Investments in subsidiaries
at fair value through profit
or loss 12.2 143,237 178,400
Total non-current assets 143,237 178,400
------------------------------- --------- ------------- -------------
Trade and other receivables 13 1,966 2,509
Cash and cash equivalents 14 42,120 40,559
------------------------------- --------- ------------- -------------
Total current assets 44,086 43,068
------------------------------- --------- ------------- -------------
Total assets 187,323 221,468
=============================== ========= ============= =============
Equity
Share capital 15 28 29
Share premium 15 306,809 311,574
Retained losses (125,029) (91,890)
------------------------------- --------- ------------- -------------
Total equity 181,808 219,713
------------------------------- --------- ------------- -------------
Trade and other payables 8,9.2,16 5,064 1,729
Unpaid capital contributions
to subsidiaries 451 26
------------------------------- --------- ------------- -------------
Total current liabilities 5,515 1,755
------------------------------- --------- ------------- -------------
Total liabilities 5,515 1,755
------------------------------- --------- ------------- -------------
Total equity and liabilities 187,323 221,468
=============================== ========= ============= =============
Net asset value per share
(cents) 6 141.22 165.60
=============================== ========= ============= =============
The accompanying notes form an integral part of these financial
statements
The financial statements were approved by the Board of Directors
on 12 November 2012 and signed on their behalf by:
Peter Tom J. Curtis Moffatt
Non-Executive Chairman Non-Executive Director
Parent company statement of changes in equity
for the year ended 30 June 2012
Share Capital Share Premium Retained losses Total
US$'000 US$'000 US$'000 US$'000
Balance at 1 July 2011 29 311,574 (91,890) 219,713
Total comprehensive loss - - (33,139) (33,139)
Transactions with owners,
recorded directly in equity:
Contributions by and
distributions to owners
Repurchase of shares (1) (4,765) - (4,766)
------------------------------- ---------------- ---------------- ------------------ -----------
Total contributions by and
distributions to owners (1) (4,765) - (4,766)
------------------------------- ---------------- ---------------- ------------------ -----------
Balance at 30 June 2012 28 306,809 (125,029) 181,808
=============================== ================ ================ ================== ===========
Balance at 1 July 2010 30 323,115 (83,577) 239,568
Total comprehensive loss - - (8,313) (8,313)
Transactions with owners,
recorded directly in equity:
Contributions by and
distributions to owners
Repurchase of shares (1) (11,541) - (11,542)
------------------------------- ---------------- ---------------- ------------------ -----------
Total contributions by and
distributions to owners (1) (11,541) - (11,542)
------------------------------- ---------------- ---------------- ------------------ -----------
Balance at 30 June 2011 29 311,574 (91,890) 219,713
=============================== ================ ================ ================== ===========
The accompanying notes form an integral part of these financial
statements
Parent company statement of cash flows
for the year ended 30 June 2012
Year ended Year ended
Note 30 June 2012 30 June 2011
US$'000 US$'000
------------------------------------------------- ------- -------------- --------------
Cash flows from operating activities
Interest received on cash balances 65 48
Operating expenses paid (5,960) (6,417)
Net cash used in operating activities (5,895) (6,369)
------------------------------------------------- ------- -------------- --------------
Cash flows from investing activities
Repayment of capital by subsidiaries
at fair value through profit or loss 12.2 15,909 8,409
Additional investments in subsidiaries
at fair value through profit or loss 12.2 (7,582) (31,355)
Amount repaid by/(paid to) group companies 3,903 (1,389)
Payment of unpaid share capital to subsidiaries - (6,930)
Net cash generated from/(used in) investing
activities 12,230 (31,265)
------------------------------------------------- ------- -------------- --------------
Cash flows from financing activities
Repurchase of shares 15 (4,766) (11,542)
Net cash used in financing activities (4,766) (11,542)
------------------------------------------------- ------- -------------- --------------
Net increase/(decrease) in cash and
cash equivalents 1,569 (49,176)
Cash and cash equivalents at start of
the year 40,559 89,609
Effect of exchange rate fluctuations
on cash and cash equivalents (8) 126
------------------------------------------------- ------- -------------- --------------
Cash and cash equivalents at end of
year 42,120 40,559
================================================= ======= ============== ==============
Reconciliation of loss before taxation Year ended Year ended
to net cash used in operating activities Note 30 June 2012 30 June 2011
US$'000 US$'000
Loss before taxation (33,139) (8,313)
Adjustments for:
Unrealised losses on revaluation of investments
at fair value through profit or loss 12.2 27,261 5,339
Gain on restructuring of subsidiary 11 - (3,381)
Foreign exchange (loss)/gain 8 (125)
Movement in trade and other receivables 8 (912)
Movement in trade and other payables (33) 1,023
------------------------------------------------- ------- -------------- --------------
Net cash used in operating activities (5,895) (6,369)
------------------------------------------------- ------- -------------- --------------
The accompanying notes form an integral part of these financial
statements
Notes to the parent company financial statements
for the year ended 30 June 2012
1 The Company
Leaf Clean Energy Company ("Leaf" or the "Company") was
incorporated in the Cayman Islands on 14 May 2007. The Company was
established to invest in clean energy projects, predominantly in
North America. Clean energy includes activities such as the
production of alternative fuels, renewable power generation and the
use of technologies to reduce the environmental impact of
traditional energy. The Company seeks to achieve long term capital
appreciation primarily through making privately negotiated
acquisitions of interest (principally equity but also
equity-related and subordinated or mezzanine debt securities) in
both projects and companies which own assets or which participate
in the clean energy sector and through the generation and
commercialisation of carbon credits derived from these
projects.
Pursuant to the Company's Admission Document dated 22 June 2007
there was an original placing of up to 200,000,000 Ordinary Shares
of GBP0.0001 par value for GBP1 each.
The Shares of the Company were admitted to trading on the AIM
market of the London Stock Exchange ("AIM") on 28 June 2007 when
dealings also commenced.
The Company's agents and the in-house management team perform
all significant functions.
2 Basis of preparation
2.1 Statement of compliance
The Company's separate financial statements have been prepared
in accordance with International Financial Reporting Standards
(IFRSs). In order to present information that is comparable with
other investment companies, Leaf publishes separate financial
statements of the Company in addition to consolidated financial
statements, which include investments in subsidiaries regarded as
part of the Company's investing business at fair value.
The financial statements were authorised for issue by the Board
of Directors on12 November 2012.
2.2 Basis of measurement
The financial statements have been prepared on the historical
cost basis except for the investments in subsidiaries that are
measured at fair value in the statement of financial position.
2.3 Functional and presentation currency
The financial statements are presented in United States Dollars
("US$"), which is the Company's functional currency. All financial
information presented in US$ has been rounded to the nearest
thousand, except when otherwise indicated.
2.4 Use of estimates and judgements
The preparation of financial statements requires management to
make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. Actual results may differ
from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised and in any future periods
affected.
The most significant area requiring estimation and judgement by
the Directors is the valuation of unquoted investments, see note 5
and 12.
3 Significant accounting policies
The accounting policies set out below have been applied
consistently to all periods presented in these financial
statements.
3.1 Financial instruments
(i) Non-derivative financial assets
The Company classifies non-derivative financial assets into the
following categories: investments at fair value through profit or
loss and, loans and receivables.
The Company initially recognised loans and receivables on the
date that they are originated. All other financial assets
(including assets designated as at fair value through profit or
loss) are recognised initially on trade date, which is the date
that the Group becomes a party to the contractual provision of the
instrument.
The Company derecognise a financial asset when the contractual
rights to the cash flows from the instrument expire, or it
transfers the rights to receive the contractual cash flows in a
transaction in which substantially all the risks and rewards of
ownership of the financial asset are transferred. Any interest in
such transferred assets that is created or retained by the Company
is recognised as a separate asset or liability.
Financial assets and liabilities are offset and the net amount
presented in the statement of financial position when, and only
when, the Company has a legal right to offset the amounts and
intends either to settle on a net basis or to realise and settle
the liability simultaneously.
Investments in subsidiaries
The Company designated its investments in subsidiaries,
including equity, loan and similar instruments, as at fair value
through profit or loss on initial recognition. Attributable
transaction costs are recognised in the profit or loss as incurred.
Gains and losses arising from changes in fair value of investments,
including foreign exchange movements, are recognised in the profit
or loss.
Unquoted investments are valued using recognised valuation
methodologies, based on the International Private Equity and
Venture Capital Guidelines, which reflect the amount for which an
asset could be exchanged between knowledgeable, willing parties on
an arm's length basis.
Loans and receivables
Loans and receivables are financial assets with fixed or
determinable payments that are not quoted in an active market. Such
assets are recognised initially at fair value plus any directly
attributable transaction costs. Subsequent to initial recognition,
loans and receivables are measured at amortised cost using the
effective interest method, less any impairment losses.
Loans and receivables comprise cash and cash equivalents, and
trade and other receivables.
Cash and cash equivalents
Cash and cash equivalents comprises cash balances and call
deposits with maturities of three months or fewer from the
acquisition date that are subject to an insignificant risk of
changes in value, and are used by the Company in the management of
its short-term commitments.
(ii) Non-derivative financial liabilities
The Company classifies non-derivative financial liabilities into
the other financial liability category. Such financial liabilities
are recognised initially at fair value less any directly
attributable transaction costs. Subsequent to initial recognition,
these financial liabilities are measured at amortised costs using
the effective interest method.
The Company initially recognises debt securities issued and
subordinated liabilities on the date that they are originated. All
other financial liabilities (including liabilities designated as at
fair value through profit or loss) are recognised initially on
trade date, which is the date that the Group becomes a party to the
contractual provision of the instrument.
The Company derecognises a financial liability when the
contractual obligations are discharged, cancelled or expire.
Other financial liabilities comprise bank overdrafts, and trade
and other payables.
Bank overdrafts that are repayable on demand and form an
integral part of the Company's cash management are included as a
component of cash and cash equivalents for the purpose of the
statement of cash flows.
3.1 Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of ordinary shares are
recognised as a deduction from equity, net of any tax effects.
Repurchase of share capital
When share capital recognised as equity is repurchased, the
amount of the consideration paid, which includes directly
attributable costs, net of any tax effects, is recognised as a
deduction from equity.
3.3 Revenue and expense recognition
Interest income is recognised on a time-proportionate basis
using the effective interest rate method.
Dividends receivable on equity and non-equity shares, which
carry significant equity rights, are recognised as revenue when the
shareholders' right to receive payment has been established,
normally ex-dividend date. When no ex-dividend date is available,
dividends receivable on or before the period end are treated as
revenue for the period. Provision is made for any dividends not
expected to be received.
Fixed returns on debt securities and loans are recognised on an
effective interest rate basis, which is the rate that exactly
discounts estimated future cash receipts through the expected life
of the financial asset to that asset's net carrying amount.
Expenses are accounted for on an accrual basis and are charged
to profit or loss. This includes expenses directly related to
making an investment which is held at fair value through profit or
loss.
3.4 Foreign currency translation
Transactions in foreign currencies are translated to the
functional currency of the Company at exchange rates at the dates
of the transactions. Monetary assets and liabilities denominated in
foreign currencies at the reporting date are retranslated to the
functional currency at the exchange rate at that date. Non-monetary
assets and liabilities denominated in foreign currencies that are
measured at fair value are retranslated to the functional currency
at the exchange rate at the date that the fair value was
determined. Foreign currency differences arising on retranslation
are recognised in profit or loss.
3.5 Dividends payable
Dividends payable are recognised as a liability in the period in
which they are declared and approved.
3.6 Earnings per share
The Company presents basic and diluted earnings per share (EPS)
data for its ordinary shares. Basic EPS is calculated by dividing
the profit or loss attributable to ordinary shareholders of the
Company by the weighted average number of ordinary shares
outstanding during the period, adjusted for own shares held.
Diluted EPS is determined by adjusting the profit or loss
attributable to ordinary shareholders and the weighted average
number of ordinary shares outstanding, adjusted for own shares
held, for the effects of all dilutive potential ordinary shares,
which comprise convertible notes and share options granted to
employees.
3.7 Income tax expense
Cayman Islands taxation
The Company received from the Governor-in-Cabinet of the Cayman
Islands, an undertaking that, for a period of 20 years from 5 June
2007 no laws of the Cayman Islands imposing any tax on profits,
income, gains or appreciation shall apply to the Company and that
no such tax or any tax in the nature of estate duty or inheritance
tax shall be payable on the shares, debentures or other obligations
of the Company. Under the current Cayman Islands law, no tax will
be charged on profits or gains of the Company and dividends of the
Company would be payable to Shareholders resident in or outside the
Cayman Islands without deduction of tax.
3.8 Future changes in accounting policies
IASB (International Accounting Standards Board) and IFRIC
(International Financial Reporting Interpretations Committee) have
issued the following standards and interpretations with an
effective date after the date of these financial statements:
New/Revised International Financial Reporting Effective date
Standards (IAS/IFRS) (accounting periods
commencing on
or after)
-------------------------------------------------------- ---------------------
IAS 1 Presentation of Financial Statements - Amendments 1 July 2012
to revise the way other comprehensive income is
presented (June 2011)
IAS 12 Income Taxes - Limited scope amendment
(recovery of underlying assets) (December 2010) 1 January 2012
IAS 19 Employee Benefits - Amendment resulting
from the Post-Employment Benefits and Termination 1 January 2013
Benefits projects (as amended in June 2011)
IAS 27 Consolidated and Separate Financial Statements 1 January 2013
- Reissued as IAS 27 Separate Financial Statements
(as amended in May 2011)
IAS 28 Investments in Associates - Reissued as 1 January 2013
IAS 28 Investments in Associates and Joint Ventures
(as amended in May 2011)
IAS 32 Financial Instruments Presentation - Amendments 1 January 2014
to application guidance on the offsetting of financial
assets and financial liabilities (December 2011)
IFRS 7 Financial Instruments: Disclosures - Amendments 1 January 2013
enhancing disclosures about offsetting of financial
assets and financial liabilities (December 2011)
IFRS 7 Financial Instruments: Disclosures - Amendments 1 January 2015
requiring disclosures about the initial applicable
of IFRS 9 (December 2011)
IFRS 9 Financial Instruments - Classification 1 January 2015
and measurement of financial assets (as amended
in December 2011)
IFRS 9 Financial Instruments - Accounting for 1 January 2015
financial liabilities and derecognition (as amended
in December 2011)
IFRS 10 Consolidated Financial Statements (May 1 January 2013
2011)
IFRS 11 Joint Arrangements (May 2011) 1 January 2013
IFRS 12 Disclosure of Interests in Other Entities 1 January 2013
(May 2011)
IFRS 13 Fair Value Measurement (May 2011) 1 January 2013
-------------------------------------------------------- ---------------------
IFRIC Interpretation
IFRIC 20 Stripping Costs in the Production Phase 1 January 2013
of a Surface Mine
-------------------------------------------------------- ---------------------
The Directors do not expect the adoption of the standards and
interpretations to have a material impact on the Company's
financial statements in the period of initial application.
4 Financial risk management
The Parent Company's investments expose it to a variety of
financial risks: market risk (including currency risk, market price
risk and interest rate risk), credit risk and liquidity risk.
Market price risk
The subsidiaries in which the Company invests operate in sectors
that may be affected by the prevailing prices of electricity, oil,
natural gas and other commodities. As energy and fuels derived from
non-renewable sources become more expensive or scarce, renewable
energy and alternative fuels become more valuable. Conversely, if
non-renewable energy and fuels become more abundant or, for other
reasons become less expensive, the value of renewable or
alternative fuels may be negatively affected. As a result, the
performance of the project companies is likely to be dependent upon
prevailing prices for these commodities, which have been
historically, and may continue to be, volatile and subject to wide
variations for a variety of reasons beyond the control of the
Company. These factors include the level of consumer product
demand, weather conditions, governmental regulations in producing
and consuming countries, the price and availability of alternative
fuels, the supply of oil and natural gas, and overall geo-political
and economic conditions. Therefore, volatility of commodity prices
may adversely affect the value of the Company'sinvestments.
Market price risk is managed by the management team of the
Company, in accordance with parameters set by the Board.
All of the Company'sinvestments comprise interests in companies
which are not publicly traded or freely marketable. The Company may
also be restricted from selling certain securities by contract or
regulatory considerations. Such investments may therefore be
difficult to value or realise. Any such realisation may involve
significant time and expense.
If the value of the Company'sinvestment portfolio
increased/decreased by 5%, the net assets of the Company would
increase/decrease by US$7,232,372 (2011: US$9,015,949)
Foreign exchange risk
The Company is exposed to foreign exchange risk with regard to
transactions made in Sterling and balances held in Sterling.
An analysis of net assets by currency exposure as at 30 June
2012 is as follows:
Net Assets Net Assets
US$'000s US$'000s
30 June 2012 30 June 2011
------------ ------------- -------------
US Dollars 181,702 219,881
Sterling 106 (168)
------------ ------------- -------------
Total 181,808 219,713
------------ ------------- -------------
An appreciation of the Sterling against the US Dollar of 5%
would have decreased net assets by US$5,034 (2011: US$5,232). A
decrease of 5% would have an equal and opposite effect.
Interest rate risk
The Company is exposed to cash flow interest rate risk on cash
balances which are all short term fixed deposits. The weighted
average interest rates on short term fixed deposits as at 30 June
2012 were:
30 June 2012 30 June 2011
% %
Cash balances
US Dollars 0.15 0.05
Sterling - -
Interest rate risk (continued)
The table below summarises the Company's exposure to interest
rate risks. It includes the financial assets and liabilities at the
earlier of contractual re-pricing or maturity date, measured by the
carrying values of assets and liabilities:
30 June 2012 Less 1-3 months 3 months 1-5 years Over Non-interest Total
than to 1 5 bearing
1month year Years
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Financial Assets
Investments in
subsidiaries at
fair value through
profit or loss - - - - - 143,237 143,237
Trade and other
receivables - - - - - 1,966 1,966
Cash and cash equivalents 35,027 - - - - 7,093 42,120
--------------------------- --------- ----------- --------- ---------- -------- ------------- ----------
Total financial
assets 35,027 - - - - 152,296 187,323
--------------------------- --------- ----------- --------- ---------- -------- ------------- ----------
Financial Liabilities
Trade and other
payables - - - - - (5,064) (5,064)
Unpaid capital
contributions to
subsidiaries - - - - - (451) (451)
--------------------------- --------- ----------- --------- ---------- -------- ------------- ----------
Total financial
liabilities - - - - - (5,515) (5,515)
--------------------------- --------- ----------- --------- ---------- -------- ------------- ----------
Total interest
rate sensitivity 35,027 - - - -
gap
--------------------------- --------- ----------- --------- ---------- -------- ------------- ----------
30 June 2011 Less 1-3 months 3 months 1-5 years Over Non-interest Total
than to 1 5 bearing
1month year Years
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Financial Assets
Investments in
subsidiaries at
fair value through
profit or loss - - - - - 178,400 178,400
Trade and other
receivables - - - - - 2,509 2,509
Cash and cash equivalents 39,110 - 1,449 - - - 40,559
--------------------------- --------- ----------- --------- ---------- -------- ------------- ----------
Total financial
assets 39,110 - 1,449 - - 180,909 221,468
--------------------------- --------- ----------- --------- ---------- -------- ------------- ----------
Financial Liabilities
Trade and other
payables - - - - - (1,729) (1,729)
Unpaid capital
contributions to
subsidiaries - - - - - (26) (26)
--------------------------- --------- ----------- --------- ---------- -------- ------------- ----------
Total financial
liabilities - - - - - (1,755) (1,755)
--------------------------- --------- ----------- --------- ---------- -------- ------------- ----------
Total interest
rate sensitivity
gap 39,110 - 1,449 - -
--------------------------- --------- ----------- --------- ---------- -------- ------------- ----------
No fair value interest rate sensitivity analysis has been
provided as no financial assets or liabilities are subject to fair
value interest rate risk. If interest rates have been 1%
higher/lower for the year, interest receivable would have been
US$350,265 (2011: US$405,590) higher/lower.
Credit risk
Credit risk is the risk that the counterparty to a financial
instrument will fail to discharge an obligation or commitment that
it has entered into with the Company.
The carrying amounts of financial assets best represent the
maximum credit risk exposure at the reporting date. This relates
also to financial assets carried at amortised cost, as they have a
short term maturity.
At the reporting date, the Company's financial assets exposed to
credit risk amounted to the following:
30 June 2012 30 June
2011
US$'000 US$'000
------------------------------------------- ------------- --------
Investments in subsidiaries at fair value
through profit or loss 143,237 178,400
Trade and other receivables 1,966 2,509
Cash and cash equivalents 42,120 40,559
187,323 221,468
------------------------------------------- ------------- --------
The maximum exposure to credit risk is represented by the
carrying amount of each financial asset in the statement of
financial position. Management does not expect any counterparty to
fail to meet its obligations. No impairment provisions have been
made as at the year end and no debtors were past their due
date.
Cash balances are held with P-1* financial institutions.
*- A Moody's rating of Prime-1 (P-1) means that the issuer has a
superior ability to repay short-term debt for the obligations.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to
meet its financial obligations as they fall due. The Company's
approach to managing liquidity is to ensure, as far as possible,
that it will have sufficient liquidity to meet its liabilities when
they fall due, under both normal and stressed conditions, without
incurring unacceptable losses. The Company's liquidity position is
monitored by the Board of Directors.
Residual undiscounted contractual maturities of financial
liabilities:
30 June 2012 Less 1-3 3 months 1-5 years Over No stated
than months to 1 year 5 years maturity
1 month
------------------------------ --------- -------- ----------- ---------- --------- ----------
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Financial liabilities
Trade and other payables (5,064) - - - - -
Unpaid capital contributions
to subsidiaries (451)
------------------------------ --------- -------- ----------- ---------- --------- ----------
(5,515) - - - - -
------------------------------ --------- -------- ----------- ---------- --------- ----------
30 June 2011 Less 1-3 3 months 1-5 years Over No stated
than months to 1 year 5 years maturity
1 month
------------------------------ --------- -------- ----------- ---------- --------- ----------
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Financial liabilities
Trade and other payables (1,729) - - - - -
Unpaid capital contributions
to subsidiaries (26)
------------------------------ --------- -------- ----------- ---------- --------- ----------
(1,755) - - - - -
------------------------------ --------- -------- ----------- ---------- --------- ----------
Fair values
All assets and liabilities at 30 June 2012 are considered to be
stated at fair value.
5. Critical accounting estimates and assumptions
These disclosures supplement the commentary on financial risk
management (see note 4).
Key sources of estimation uncertainty
Determining fair values
The determination of fair values for financial assets for which
there is no observable market prices requires the use of valuation
techniques as described in accounting policy 3.1. For financial
instruments that trade infrequently and have little price
transparency, fair value is less objective, and requires varying
degrees of judgement depending on liquidity, concentration,
uncertainty of market factors, pricing assumptions and other risks
affecting the specific instrument. See also "Valuation of financial
instruments" below.
Critical judgements in applying the Company's accounting
policies
Critical judgements made in applying the Company's accounting
policies include:
Valuation of financial instruments
The Company's accounting policy on fair value measurements is
discussed in accounting policy 3.1. The Company measures fair value
using the following hierarchy that reflects the significance of
inputs used in making the measurements:
-- Level 1: Quoted market price (unadjusted) in an active market for an identical instrument.
-- Level 2: Valuation techniques based on observable inputs,
either directly (i.e., as prices) or indirectly (i.e., derived from
prices). This category includes instruments valued using: quoted
market prices in active markets for similar instruments: quoted
market prices for identical or similar instruments in markets that
are considered less than active; or other valuation techniques
where all significant inputs are directly or indirectly observable
from market data.
-- Level 3: Valuation techniques using significant unobservable
inputs. This category includes all instruments where the valuation
technique includes inputs not based on observable data and the
unobservable inputs have a significant effect on the instrument's
valuation. This category includes instruments that are valued based
on quoted prices for similar instruments where significant
unobservable adjustments or assumptions are required to reflect
differences between the instruments.
Fair values of financial assets and financial liabilities that
are traded in active markets are based on quoted market prices or
dealer price quotations. For all other financial instruments the
Company determines fair values using valuation techniques.
The Company, through its wholly-owned subsidiaries, holds full
or partial ownership interests in a number of unquoted clean energy
companies. The Company's investments are classified as level 3 in
the fair value hierarchy. A reconciliation from the beginning
balances to the ending balances is shown in note 12.
6 Net Asset Value per Share
The net asset value per share as at 30 June 2012 is 141.22 cents
based on net assets of US$181,808,657 and 128,745,726ordinary
shares in issue as at that date (2011: 165.60 cents based on net
assets of US$219,713,487 and 132,675,726ordinary shares).
7 Interest income on cash balances
Year ended 30 June 2012 Year ended 30 June 2011
US$'000 US$'000
Interest income receivable on Sterling cash balances - 1
Interest income receivable on US Dollar cash balances 65 47
------------------------------------------------------- ------------------------ ------------------------
65 48
------------------------------------------------------- ------------------------ ------------------------
8 Management service fees
Leaf's wholly-owned subsidiary, Leaf Clean Energy USA, LLC
("Leaf USA"), in Washington, DCprovides assets advisory, portfolio
management and certain administrative services to the Company. Leaf
USA is entitled to management fees which are calculated based on
20% mark up on the costs of the asset advisory and portfolio
management services provided to Leaf Clean Energy Company. The
administrative services provided to Leaf Clean Energy Company are
at cost base with nil mark up.
Leaf USA Service fees for the year ended 30 June 2012 payable to
Leaf USA were US$3,721,087 (year ended 30 June 2011: US$3,775,686)
and the amount accrued but not paid at the period end was
US$584,690 (30 June 2011: US$364,626).
9 Other administration expenses
Year ended 30 June 2012 Year ended 30 June 2011
US$'000 US$'000
Directors' remuneration (note 10) 1,248 1,069
Legal and professional fees (note 9.1) 228 715
Administration fees (note 9.2) 195 313
Travel and subsistence expenses 289 259
Directors' and Officers' insurance expense 97 106
Audit fees 89 99
Other expenses 9 93
Printing and stationery expenses 15 50
Registrar fees and costs 44 48
Total 2,214 2,752
-------------------------------------------- ------------------------ ------------------------
9.1 Legal and professional fees
Legal and professional fees represent legal, advisory and
consultancy fees incurred during and after the implementation of
investment acquisitions.
9.2 Administration fees
With effect from November 2009, the Company administrator is
entitled to an administration fee, payable quarterly in arrears and
calculated in respect of each quarter or other period with a
minimum fee of GBP25,000 per quarter at the rate of 0.1% per annum
where the total assets of the parent company less borrowings is
less than US$100,000,000; 0.09% where the total assets of the
Company less borrowings at the end of the relevant quarter is
greater than or equal to US$100,000,000 but less than
US$200,000,000; and at the rate of 0.08% per annum where the total
assets of the Company less borrowings at the end of the relevant
quarter is greater than or equal to US$200,000,000.
Administration fees for the year amounted to US$195,056 (2011:
US$312,840) and US$42,493 was outstanding as at 30 June 2012 (2011:
US$53,049).
10 Directors' remuneration
In February 2011, Mercer Limited ("Mercer") was engaged to
conduct an independent remuneration review, and Mercer's
recommendation was adopted by the Board at its meeting on 3 March
2011. As recommended by Mercer, the basic annual remuneration for
the Chairman and the Executive Director was maintained at
US$200,000 and US$400,000 respectively. In addition, the Executive
Director is eligible to receive an annual bonus of US$350,000. The
Non-Executive Directors fees were reduced from US$150,000 to
US$60,000 with a US$2,500 fee for each board meeting attendance, a
US$10,000 fee for Audit Committee membership and a US$1,500 fee
reimbursement for each additional day attending the Company's
meetings.
Details of the Directors' basic annual remuneration during the
year were as follows:
Remuneration Remuneration Remuneration
for year for the period for the period
to from 1 April from 1 July
30 June 2012 2011 to 30 2010 to 31
June 2011 March 2011
US$'000 US$'000 US$'000
Peter Tom (Chairman) 200 200 200
Bran Keogh 400 400 400
J. Curtis Moffatt 148 60 150
Peter O'Keefe 150 60 150
898 720 900
---------------------- -------------- ---------------- ----------------
Directors' fees and expenses paid during the year were as
follows:
30 June 2012 Directors' Annual Total
fees bonus
US$'000 US$'000 US$'000
Peter Tom (Chairman) 200 - 200
Bran Keogh 400 350 750
J. Curtis Moffatt 148 - 148
Peter O'Keefe 150 - 150
898 350 1,248
---------------------- ----------- -------- --------
30 June 2011 Directors' Other emoluments Total
fees
US$'000 US$'000 US$'000
Peter Tom (Chairman) 200 - 200
Bran Keogh 400 175 575
J. Curtis Moffatt 143 - 143
Peter O'Keefe 151 - 151
894 175 1,069
---------------------- ----------- ----------------- --------
The Directors are also entitled to receive reimbursement of any
expenses in relation to their appointment. Total reimbursement fees
paid to the Directors for the year ended 30 June 2012amounted to
US$218,230 (2011: US$216,750) of which US$nil was outstanding at 30
June 2012 (June 2011: US$nil).
11 Gain on restructuring of subsidiary
For efficient portfolio management purposes, the Company
dissolved one of its subsidiaries in 2011, Leaf Finance Company,
and distributed its net assets to the Company. The dissolution
resulted in a one-time net gain of US$3,381,454. This had no effect
on profit or loss or net assets of the Company as investments in
subsidiaries are stated at fair value and there was a consequent
movement in the unrealised gain/loss on revaluation.
12 Investments
12.1 The subsidiaries
Since incorporation, for efficient portfolio management
purposes, the Company has established the following subsidiary
companies:
Country of Percentage of
incorporation shares held
------------------------------------- ---------------- --------------
Leaf Bioenergy Company Cayman Islands 100%
Leaf Biomass Company Cayman Islands 100%
Leaf Biomass Investments, Inc.* USA (Delaware) 100%
Leaf Clean Energy USA, LLC USA (Delaware) 100%
Leaf Escalona Company* Cayman Islands 100%
Leaf Hydro Company Cayman Islands 100%
Leaf Invenergy Company* Cayman Islands 100%
Leaf Invenergy US Investments, Inc* USA (Delaware) 100%
Leaf LFG Company Cayman Islands 100%
Leaf LFG US Investments, Inc.* USA (Delaware) 100%
Leaf MaxWest Company* USA (Delaware) 100%
Leaf Miasolé* Cayman Islands 100%
Leaf Skyfuels Company* Cayman Islands 100%
Leaf Solar Company Cayman Islands 100%
Leaf VREC* Cayman Islands 100%
Leaf Waste Energy Cayman Islands 100%
Leaf Wind Company Cayman Islands 100%
*Indirect subsidiaries
The Company also has control over the following underlying
investee companies:
Country of Principal activity Effective interest held
incorporation
--------------------------------- -------------------- -------------------- ------------------------
Energia Escalona Coopertief U.A Netherlands Hydro Energy 87.5%
Escalona B.V Netherlands Hydro Energy 87.5%
Energia Escalona I S.A. de C.V Mexico Hydro Energy 87.5%
Energia Escalona s.r.l. Mexico Hydro Energy 87.5%
Energentum S.A. de C.V Mexico Hydro Energy 86.6%
Johnstown Regional Energy LLC USA (Pennsylvania) Landfill Gas 100%
Multitrade Rabun Gap LLC USA (Virginia) Biomass 75%(1)
Multitrade Telogia LLC USA (Virginia) Biomass 61.25%(2)
Telogia Power LLC USA (Virginia) Biomass 61.25%(2)
--------------------------------- -------------------- -------------------- ------------------------
(1) Voting rights 81.9%
(2) Voting rights 66.25%
12.2 Investments in subsidiaries at fair value through profit or loss
30 June 2012 30 June 2011
US$'000 US$'000
Balance brought forward 178,400 159,331
Additional investments in subsidiaries 7,582 33,974
Repayment of capital investment (15,909) (8,409)
Increase in unpaid share capital contributions 425 -
Unpaid share capital reversed - (1,157)
Movement in fair value of investments in subsidiaries (27,261) (5,339)
------------------------------------------------------- ------------- -------------
Balance carried forward 143,237 178,400
------------------------------------------------------- ------------- -------------
12.3 Portfolio valuation methodology
Unquoted investments are valued by applying an appropriate
valuation technique, which makes maximum use of market-based
information, is consistent with models generally used by market
participants and is applied consistently from period to period,
except where a change would result in a better estimation of fair
value. The Company primarily invests in unquoted direct
investments. Unquoted direct investments have characteristics
similar to private equity investments, in that the value is
generally determined through the sale or flotation of the entire
business, rather than the sale of an individual instrument.
Valuations of such investments are based upon the "International
Private Equity and Venture Capital Valuation Guidelines."
The in-house management conducted a valuation analysis of the
Company's investment portfolio based upon standard valuation
approaches compatible with the "International Private Equity and
Venture Capital Valuation Guidelines." Given the uncertainties
inherent in estimating the fair value of unquoted direct
investments, a degree of caution was applied by the in house
management in exercising judgements and making the necessary
estimate.
13 Trade and other receivables
30 June 2012 30 June 2011
US$'000 US$'000
Inter-company receivables 1,885 2,420
Prepayments 73 89
Other receivables 8 -
Total 1,966 2,509
--------------------------- ------------- -------------
Amounts due from group companies are unsecured, interest free
and receivable on demand.
14 Cash and cash equivalents
30 June 2012 30 June 2011
US$'000 US$'000
Short term fixed deposits 35,027 29,137
Bank current account balances 7,026 9,973
Restricted cash * 67 1,449
------------------------------- ------------- -------------
Total 42,120 40,559
------------------------------- ------------- -------------
* Restricted cash balance consists of a credit card cash
security of US$67,481.
The short-term deposits are subject to interest rates at 0.12%
per annum and are fixed for periods ranging up to 1 month from the
statement of financial position date.
15 Share capital
Ordinary shares of GBP0.0001 Number of shares Share capital Share premium
each
US$'000 US$'000
At 30 June 2011 132,675,726 29 311,574
Repurchased during the
year (3,930,000) (1) (4,765)
------------------------------ ----------------- -------------- --------------
At 30 June 2012 128,745,726 28 306,809
------------------------------ ----------------- -------------- --------------
The authorised share capital of the Company is GBP25,000 divided
into 250 million Ordinary Shares of GBP0.0001 each.
Under the terms of the placement on 22 June 2007, the Company
issued 200,000,000 shares of GBP0.0001 each par value at a price of
GBP1 each. The difference between the issue price and the par value
was transferred to share premium account, net of share issue
expenses.
Share capital and premium received was translated to US Dollars
at the exchange rate prevailing at the date of receipt of the
proceeds.
The holders of ordinary shares are entitled to receive dividends
as declared from time to time and are entitled to one vote per
share at meetings of the Company. All shares rank equally with
regards to the Company's assets.
During the year 3,930,000 shares were repurchased by the Company
leaving 128,745,726 shares in issue as at 30 June 2012. The shares
were repurchased in 3 tranches at an average price of 77.98 pence
per share for a total cost, including transaction costs, of
GBP3,086,097 (US$4,766,063). The Company's share price has averaged
77 pence during the year.
The repurchases of the Company's shares are in line with its
capital management philosophy whereby the Board manages the
Company's affairs to achieve shareholder returns through capital
growth rather than income, and monitors the achievement of this
through growth in net asset value per share.
Capital management
The Board's policy is to maintain a strong capital base so as to
maintain investor, creditor and market confidence and to sustain
future development of the business. The Board manages the Company's
affairs to achieve shareholder returns through capital growth
rather than income, and monitors the achievement of this through
growth in net asset value per share.
Company capital comprises share capital, share premium and
reserves. The Company is not subject to externally imposed capital
requirements.
16 Trade and other payables
30 June2012 30 June 2011
US$'000 US$'000
Amounts due to subsidiaries* 4,455 1,087
Other creditors 124 520
Audit fees payable 65 69
Administration fees payable 43 53
Directors' fees payable 377 -
Total 5,064 1,729
------------------------------ ------------ -------------
*Amounts due to subsidiaries and other related parties are
unsecured, interest free and payable on demand.
17 Basic and diluted loss per share
Basic and diluted loss per share is calculated by dividing the
loss attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the year:
Year ended Year ended
30 June 2012 30 June 2011
Loss attributable to equity holders of the Company (US$'000) (33,139) (8,313)
Weighted average number of ordinary shares in issue (thousands) 130,720 142,649
----------------------------------------------------------------- -------------- --------------
Basic and fully diluted loss per share (cents per share) (25.35) (5.83)
----------------------------------------------------------------- -------------- --------------
There is no difference between the basic and diluted loss per
share for the year as there are no potential dilutive ordinary
shares.
18 Related party transactions
Parties are considered to be related if one party has the
ability to control the other party or to exercise significant
influence over the other party in making financial or operational
decisions.
The Company administrator and the Directors are considered
related parties due to the significance of the contracts with these
parties. Details of the fee arrangements with these parties are
given in notes 9.2 and 10.
19 Capital commitments
As at 30 June 2012, there were no capital commitments in respect
of investments.
20 Exchange rates
The following exchange rates were used to translate assets and
liabilities into the reporting currency at 30 June 2012:
GBP Sterling to US$ 1.5685 (2011: 1.6054)
21 Conversion to US GAAP
There is no material difference between the net assets as stated
under International Financial Reporting Standards and as they would
have been stated if the accounts had been prepared under US
GAAP.
22 Subsequent events
On 20 July 2012, Leaf announced that it had made a $5 million
equity investment in Lehigh Technologies, Inc.
Consolidated statement of comprehensive income
for the year ended 30 June 2012
Note Year ended Year ended
30 June 2012 30 June 2011
US$'000 US$'000
Interest income on cash balances 68 49
Interest income on investments
at fair value through profit
or loss 9 4 2,601
Gain on deconsolidation of
subsidiary - 5,176
Fair value movement on investments 14.1 (16,053) 750
Net foreign exchange gain/(loss) 10 115
------------------------------------- ----- -------------- --------------
Gross portfolio return (15,971) 8,691
Other administration expenses 8 (2,214) (2,752)
------------------------------------- ----- -------------- --------------
Net portfolio return (18,185) 5,939
Sales revenue and other income 27,081 23,151
Profit on disposal of assets 39 5
Impairment of non-financial
assets 11 (9,801) (7,048)
Operating expenses (31,786) (36,714)
------------------------------------- ----- -------------- --------------
Loss before finance costs (32,652) (14,667)
Finance costs 9.2 (1,458) (1,557)
------------------------------------- ----- -------------- --------------
Loss before taxation (34,110) (16,224)
Taxation (331) (218)
------------------------------------- ----- -------------- --------------
Loss for the year (34,441) (16,442)
===================================== ===== ============== ==============
Other comprehensive income
Exchange differences on translation
of foreign operations 58 (24)
------------------------------------- ----- -------------- --------------
Total comprehensive income (34,383) (16,466)
===================================== ===== ============== ==============
Loss for the year attributable
to
Equity holders of the parent (34,005) (10,109)
Non-controlling interests (436) (6,333)
------------------------------------- ----- -------------- --------------
(34,441) (16,442)
===================================== ===== ============== ==============
Total comprehensive income
attributable to
Equity holders of the parent (33,954) (10,133)
Non-controlling interests (429) (6,333)
------------------------------------- ----- -------------- --------------
(34,383) (16,466)
===================================== ===== ============== ==============
Basic and diluted loss per
share (cents) 12 (26.01) (7.10)
===================================== ===== ============== ==============
The accompanying notes form an integral part of these financial
statements
Consolidated statement of financial position
as at 30 June 2012
Note 30 June 2012 30 June 2011
US$'000 US$'000
Assets
Investments at fair value
through profit or loss 14.1 110,171 131,424
Property, plant and equipment 17 43,053 45,014
Intangible assets 18 3,470 13,424
------------------------------- --------- ------------- -------------
Total non-current assets 156,694 189,862
------------------------------- --------- ------------- -------------
Inventories 517 521
Trade and other receivables 15 6,483 8,183
Cash and cash equivalents 16 49,101 46,622
------------------------------- --------- ------------- -------------
Total current assets 56,101 55,326
------------------------------- --------- ------------- -------------
Total assets 212,795 245,188
=============================== ========= ============= =============
Equity
Share capital 19 28 29
Share premium 19 306,809 311,574
Foreign currency translation
reserve (97) (148)
Retained losses (132,756) (98,751)
------------------------------- --------- ------------- -------------
Total equity attributable
to equity holders of the
parent 173,984 212,704
Non-controlling interests (804) (991)
------------------------------- --------- ------------- -------------
Total equity 173,180 211,713
------------------------------- --------- ------------- -------------
Liabilities
Loans and borrowings 21 33,743 28,094
Total non-current liabilities 33,743 28,094
------------------------------- --------- ------------- -------------
Loans and borrowings 21 2,687 2,840
Trade and other payables 7,8.2,20 3,185 2,541
Total current liabilities 5,872 5,381
------------------------------- --------- ------------- -------------
Total liabilities 39,615 33,475
------------------------------- --------- ------------- -------------
Total equity and liabilities 212,795 245,188
=============================== ========= ============= =============
The accompanying notes form an integral part of these financial
statements
The financial statements were approved by the Board of Directors
on 12 November 2012 and signed on their behalf by:
Peter Tom J. Curtis Moffatt
Non-Executive Chairman Non-Executive Director
Consolidated statements of changes in equity
for the year ended 30 June 2012
Share Share Foreign Retained Total Non-controlling Total
capital premium currency losses interests equity
translation
reserve
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
------------------ ------------ ------------ ------------ ----------- ----------- ---------------- ------------
Balance at 1 July
2011 29 311,574 (148) (98,751) 212,704 (991) 211,713
Total
comprehensive
loss - - 51 (34,005) (33,954) (429) (34,383)
Transactions with
owners, recorded
directly in
equity:
Contributions by
and distributions
to owners
Repurchase of
shares (1) (4,765) - - (4,766) - (4,766)
------------------ ------------ ------------ ------------ ----------- ----------- ---------------- ------------
Total
contributions by
and
distributions to
owners (1) (4,765) - - (4,766) - (4,766)
------------------ ------------ ------------ ------------ ----------- ----------- ---------------- ------------
Changes in
ownership
interest in
subsidiaries
Contributions
by
non-controlling
interests - - - - - 616 616
------------------ ------------ ------------ ------------ ----------- ----------- ---------------- ------------
Total changes in
ownership
interests in
subsidiaries - - - - - 616 616
------------------ ------------ ------------ ------------ ----------- ----------- ---------------- ------------
Balance at 30
June 2012 28 306,809 (97) (132,756) 173,984 (804) 173,180
------------------ ------------ ------------ ------------ ----------- ----------- ---------------- ------------
Balance at 1 July
2010 30 323,115 (124) (88,642) 234,379 1,951 236,330
Total
comprehensive
loss - - (24) (10,109) (10,133) (6,333) (16,466)
Transactions with
owners,
recorded directly
in equity:
Contributions by
and
distributions to
owners
Repurchase of
shares (1) (11,541) - - (11,542) - (11,542)
Total
contributions by
and
distributions to
owners (1) (11,541) - - (11,542) - (11,542)
Changes in
ownership
interest in
subsidiaries
Deconsolidation
of subsidiary - - - - - 3,391 3,391
------------------ ------------ ------------ ------------ ----------- ----------- ---------------- ------------
Total changes in
ownership
interests in
subsidiaries - - - - - 3,391 3,391
------------------ ------------ ------------ ------------ ----------- ----------- ---------------- ------------
Balance at 30
June 2011 29 311,574 (148) (98,751) 212,704 (991) 211,713
The accompanying notes form an integral part of these financial
statements
Consolidated statement of cash flows
for the year ended 30 June 2012
Year ended Year ended
Note 30 June 2012 30 June 2011
US$'000 US$'000
Cash flows from operating activities
Interest received on cash balances 2,694 49
Cash received from customers 26,166 22,992
Interest paid (1,458) (1,557)
Operating expenses paid (30,378) (39,218)
--------------------------------------------- ------- -------------- --------------
Net cash used in operating activities (2,976) (17,734)
--------------------------------------------- ------- -------------- --------------
Cash flows from investing activities
Purchase of financial assets at fair
value through profit or loss 14.1 (4,800) (26,155)
Repayment of financial assets at fair
value through profit or loss 14.1 10,000 -
Purchase of customer contract - (1,381)
Net purchases of property, plant and
equipment (1,159) (2,086)
Net cash on deconsolidation of subsidiary - 88
--------------------------------------------- ------- -------------- --------------
Net cash generated from/(used in) investing
activities 4,041 (29,534)
--------------------------------------------- ------- -------------- --------------
Cash flows from financing activities
Repurchase of shares during the year 19 (4,766) (11,542)
Capital contributions from non-controlling 616 -
interests
Net borrowings received 21 5,496 6,333
Net cash generated from/(used in) financing
activities 1,346 (5,209)
--------------------------------------------- ------- -------------- --------------
Net increase/(decrease) in cash and
cash equivalents 2,411 (52,477)
Cash and cash equivalents at start of
the year 46,622 98,978
Effect of exchange rate fluctuations
on cash and cash equivalents 68 121
--------------------------------------------- ------- -------------- --------------
Cash and cash equivalents at end of
the year 49,101 46,622
--------------------------------------------- ------- -------------- --------------
The accompanying notes form an integral part of these financial
statements
Year ended Year ended
Note 30 June 2012 30 June
2011
Reconciliation of loss for the year to US$'000 US$'000
net cash used in operating activities
Loss for the year (34,441) (16,442)
Adjustments for:
Gain on deconsolidation of subsidiary - (5,176)
Fair value movement on investments 14.1 16,053 (750)
Impairment of non-financial assets 11 9,801 7,048
Depreciation expense/net of grant amortisation 17 3,159 4,328
Amortisaton of intangible assets 18 153 133
Foreign exchange gain (10) (145)
Profit on disposal of assets (39) (5)
------------------------------------------------ ------- -------------- -----------
Operating loss before changes in working
capital (5,324) (11,009)
Movement in inventories 4 (145)
Movement in trade and other receivables 1,700 (4,380)
Movement in trade and other payables 644 (2,200)
------------------------------------------------ ------- -------------- -----------
Net cash used in operating activities (2,976) (17,734)
------------------------------------------------ ------- -------------- -----------
The accompanying notes form an integral part of these financial
statements
Notes to the consolidated financial statements
for the year ended 30 June 2012
1 The Company
Leaf Clean Energy Company ("Leaf" or the "Company") was
incorporated in the Cayman Islands on 14 May 2007. The Company was
established to invest in clean energy projects, predominantly in
North America. Clean energy includes activities such as the
production of alternative fuels, renewable power generation and the
use of technologies to reduce the environmental impact of
traditional energy. The Company seeks to achieve long term capital
appreciation primarily through making privately negotiated
acquisitions of interest (principally equity but also
equity-related and subordinated or mezzanine debt securities) in
both projects and companies which own assets or which participate
in the clean energy sector and through the generation and
commercialisation of carbon credits derived from these
projects.
Pursuant to the Company's Admission Document dated 22 June 2007
there was an original placing of up to 200,000,000 Ordinary Shares
of GBP0.0001 par value for GBP1 each.
The Shares of the Company were admitted to trading on the AIM
market of the London Stock Exchange ("AIM") on 28 June 2007 when
dealings also commenced.
The Company's agents and the management teamperform all
significant functions. Accordingly, the Company itself has no
employees.
The consolidated financial statements of the Company as at and
for the year ended 30 June 2012 comprise the Company and its
subsidiaries (together referred to as the "Group" and individually
as "Group entities").
2 Basis of preparation
2.1 Statement of compliance
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards
(IFRSs).
The consolidated financial statements were authorised for issue
by the Board of Directors on 12 November 2012.
2.2 Basis of measurement
The financial statements have been prepared on the historical
cost basis except for financial instruments at fair value through
profit or loss measured that are measured at fair value in the
statement of financial position.
2.3 Functional and presentation currency
The consolidated financial statements are presented in United
States Dollars ("US$"), which is the Company's functional currency.
All financial information presented in US$has been rounded to the
nearest thousand, except when otherwise indicated.
2.4 Use of estimates and judgements
The preparation of consolidatedfinancial statements requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual
results may differ from these estimates.
Except as described below, in preparing these consolidated
financial statements, the significant judgements made by management
in applying the Group's accounting policies and the key sources of
estimation uncertainty are as follows:
During the year ended 30 June 2012management reassessed its
estimates in respect of:
-- the valuation of unquoted investments (see note 14); and
-- impairment of goodwill and other intangible assets (see note 11 and 18)
3. Significant accounting policies
The accounting policies set out below have been applied
consistently to all periods presented in these consolidated
financial statements, and have been applied consistently by Group
entities.
3.1 Basis of consolidation
(i) Business combinations
Business combinations are accounted for using the acquisition
method as at the acquisition date, which is the date on which
control is transferred to the Group. Control is the power to govern
the financial and operating policies of an entity so as to obtain
benefits from its activities. In assessing control, the Group takes
into consideration potential voting rights that currently are
exercisable.
The Group measures goodwill at the acquisition date as:
-- the fair value of the consideration transferred; plus
-- the recognised amount of any non-controlling interests in the acquire; plus
-- if the business combination is achieved in stages, the fair
value of the pre-existing equity interest in the acquire; less
-- the net recognised amount (generally fair value) of the
identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is
recognised immediately in the profit or loss.
The consideration transferred does not include amounts related
to the settlement of pre-existing relationships. Such amounts
generally are recognised in profit or loss.
Transactions costs, other than those associated with the issue
of debt or equity securities, that the Group incurs in connection
with a business combination are expenses as incurred.
Any contingent consideration payable is measured at fair value
at the acquisition date. If the contingent consideration is
classified as equity, then it is not remeasured and settlement is
accounted for within equity. Otherwise, subsequent changes in the
fair value of the contingent consideration are recognised in profit
or loss.
When share-based payment awards ("replacement awards") are
required to be exchanged for awards held by the acquiree's
employees ("acquiree's awards") and relate to past services, then
all or a portion of the amount of the acquirer's replacement awards
is included in measuring the consideration transferred in the
business combination. This determination is based on the
market-based value of the replacement awards compared with the
market-based value of the acquiree's awards and the extent to which
the replacement wards relate to past and/or future service.
(ii) Acquisition of non-controlling interests
Acquisitions of non-controlling interests are accounted for as
transactions with owners in their capacity as owners and therefore
no goodwill is recognised as a result. Adjustments to
non-controlling interests arising from the transactions that do not
involve the loss of control are based on a proportionate amount of
the net asset assets of the subsidiary.
(iii) Subsidiaries
Subsidiaries are entities controlled by the Group. The financial
statements of subsidiaries are included in the consolidated
financial statements from the date that control commences until the
date that control ceases.
The accounting policies of subsidiaries are changed when
necessary to align them with the policies adopted by the Group.
Losses applicable to the non-controlling interests in a subsidiary
are allocated to the non-controlling interests even if doing so
causes the non-controlling interests to have a deficit balance.
(iv) Loss of control
On the loss of control, the Group derecognises the assets and
liabilities of the subsidiary, any non-controlling interests and
other components of equity related to the subsidiary. Any surplus
or deficit arising from the loss of control is recognised in profit
or loss. If the Group retains any interest in the previous
subsidiary, then such interest is measured at fair value at the
date that control is lost. Subsequently it is accounted for as
equity accounted investee or as an available-for-sale financial
asset depending on the level of influence retained.
(v) Investment in associates and jointly controlled entities (equity-accounted investees)
An associate is an entity over which the Group is in a position
to exercise significant influence, but not control or joint
control, through the financial and operating policy decisions of
the investee entity. As Leaf is an investment company, and its
investments held in associates are designated as held at fair value
through profit or loss, the provisions of IAS 28 'Investments in
Associates' do not apply. Such investments are measured at fair
value, with changes in fair value recognised in profit or loss in
the period in which they occur.
(vi) Joint ventures
A joint venture is a contractual arrangement whereby two or more
parties undertake an economic activity that is subject to joint
control. As the Company is an investment company, and its interests
held in joint ventures are designated as held at fair value through
profit or loss, the provisions of IAS 31 'Interests in Joint
Ventures' do not apply. Such interests are measured at fair value,
with changes in fair value recognised in profit or loss in the
period in which they occur.
(vii) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised gains
arising from intra-group transactions, are eliminated in preparing
the consolidated financial statements. Unrealised losses are
eliminated in the same way as unrealised gains, but only to the
extent that there is no evidence of impairment.
3.1 Foreign currency
(i) Foreign currency transactions
Transactions in foreign currencies are translated to the
functional currencies of the Group's entities at exchange rates at
the dates of the transactions. Monetary assets and liabilities
denominated in foreign currencies at the reporting date are
retranslated to the functional currency at the exchange rate at
that date. Non-monetary assets and liabilities denominated in
foreign currencies that are measured at fair value are retranslated
to the functional currency at the exchange rate at the date that
the fair value was determined. Foreign currency differences arising
on retranslation are recognised in profit or loss.
(ii) Foreign operations
The assets and liabilities of foreign operations, including
goodwill and fair value adjustments arising on acquisition, are
translated to US Dollars at exchange rates at the reporting date.
The income and expenses of foreign operations, excluding foreign
operations in hyperinflationary economies, are translated to US
Dollars at exchange rates at the dates of the transaction.
Foreign currency differences are recognised in other
comprehensive income, and presented in the foreign currency
translation reserve (translation reserve) in equity. When a foreign
operation is disposed of such that control, significant influence
or joint control is lost, the cumulative amount in the translation
reserve related to that foreign operation is reclassified to profit
or loss as part of the gain or loss on disposal. When the Group
disposes of only part of its interest in a subsidiary that includes
a foreign operation while retaining control, the relevant
proportion of the cumulative amount is reattributed to
non-controlling interests.
3.3 Property, plant and equipment
(i) Recognition and measurement
Items of property, plant and equipment are measured at cost less
accumulated depreciation and accumulated impairment losses. Cost
includes expenditure that is directly attributable to the
acquisition of the asset. The cost of self-constructed assets
includes the cost of materials and direct labour, any other costs
directly attributable to bringing the assets to a working condition
for their intended use, the costs of dismantling and removing the
items and restoring the site on which they are located, and
capitalised borrowing costs. Cost also may include transfers from
other comprehensive income of any gain or loss on qualifying cash
flow hedges of foreign currency purchases of property, plant and
equipment. Purchased software that is integral to the functionality
of the related equipment is capitalised as part of that
equipment.
When parts of an item of property, plant and equipment have
different useful lives, they are accounted for as separate items
(major components) of property, plant and equipment.
Gains and losses on disposal of an item of property, plant and
equipment are determined by comparing the proceeds from disposal
with the carrying amount of property, plant and equipment, and are
recognised net within other income in profit or loss. When revalued
assets are sold, the amounts included in the revaluation reserve
are transferred to retained earnings.
(ii) Subsequent costs
The cost of replacing a part of an item of property, plant and
equipment is recognised in the carrying amount of the item if it is
probable that the future economic benefits embodied within the part
will flow to the Group, and its cost can be measured reliably. The
carrying amount of the replaced part is derecognised. The costs of
the day-to-day servicing of property, plant and equipment are
recognised in profit or loss as incurred.
(iii) Depreciation
Depreciation is calculated over the depreciable amount, which is
the cost of an asset, or other amount substituted for cost, less
its residual value. Depreciation is recognised in profit or loss on
a straight-line basis over the estimated useful lives of each part
of an item of property, plant and equipment, since this most
closely reflects the expected pattern of consumption of the future
economic benefits embodied in the asset.
Leased assets are depreciated over the shorter of the lease term
and their useful lives unless it is reasonably certain that the
Group will obtain ownership by the end of the lease term. Land is
not depreciated.
The estimated useful lives for the current and comparative
periods are as follows:
-- buildings 39 years
-- plant and equipment 5 to 20 years
-- fixtures and fittings 5-7 years
-- motor vehicles 5 years
Depreciation methods, useful lives and residual values are
reviewed at each financial year-end and adjusted if appropriate
3.4 Intangible assets
(i) Goodwill
Goodwill that arises upon the acquisition of subsidiaries is
included in intangible assets. For measurement of goodwill at
initial recognition, see note 3.1 (i).
Acquisitions of non-controlling interests
Acquisitions of non-controlling interests are accounted for as
transactions with equity holders in their capacity as equity
holders and therefore no goodwill is recognised as a result of such
transactions.
Subsequent measurement
Goodwill is measured at cost less accumulated impairment
losses.
(ii) Other intangible assets
Other intangible assets that are acquired by the Group and have
finite useful lives are measured at cost less accumulated
amortisation and accumulated impairment losses.
3.5 Financial instruments
(i) Non-derivative financial assets
The Group classifies non-derivative financial assets into the
following categories: investments at fair value through profit or
loss and, loans and receivables.
The Group initially recognised loans and receivables on the date
that they are originated. All other financial assets (including
assets designated as at fair value through profit or loss) are
recognised initially on trade date, which is the date that the
Group becomes a party to the contractual provision of the
instrument.
The Group derecognises a financial asset when the contractual
rights to the cash flows from the instrument expire, or it
transfers the rights to receive the contractual cash flows in a
transaction in which substantially all the risks and rewards of
ownership of the financial asset are transferred. Any interest in
such transferred assets that is created or retained by the Group is
recognised as a separate asset or liability.
Financial assets and liabilities are offset and the net amount
presented in the statement of financial position when, and only
when, the Group has a legal right to offset the amounts and intends
either to settle on a net basis or to realise and settle the
liability simultaneously.
Investments at fair value through profit or loss
The Group designates its investments, including equity, loan and
similar instruments, as at fair value through profit or loss on
initial recognition. Attributable transaction costs are recognised
in the profit or loss as incurred. Gains and losses arising from
changes in fair value of investments, including foreign exchange
movements, are recognised in the profit or loss for the year.
Unquoted investments are valued using recognised valuation
methodologies, based on the International Private Equity and
Venture Capital Guidelines, which reflect the amount for which an
asset could be exchanged between knowledgeable, willing parties on
an arm's length basis.
The Group holds a number of investments in entities over which
it has significant influence which meet the definition of
associates in IAS 28 Investment in Associates. The Group has taken
advantage of the exemption from applying IAS 28 as these
investments are held as part of the Group's portfolio with a view
to the ultimate realisation of capital gains. These investments are
accounted for at fair value through profit or loss.
Loans and receivables
Loans and receivables are financial assets with fixed or
determinable payments that are not quoted in an active market. Such
assets are recognised initially at fair value plus any directly
attributable transaction costs. Subsequent to initial recognition,
loans and receivables are measured at amortised cost suing the
effective interest method, less any impairment losses (see (note
3.6).
Loans and receivables comprise cash and cash equivalents, and
trade and other receivables.
Cash and cash equivalents
Cash and cash equivalents comprises cash balances and call
deposits with maturities of three months or fewer from the
acquisition date that are subject to an insignificant risk of
changes in value, and are used by the Group in the management of
its short-term commitments.
(i) Non-derivative financial liabilities
The Group classifies non-derivative financial liabilities into
the other financial liability category. Such financial liabilities
are recognised initially at fair value less any directly
attributable transaction costs. Subsequent to initial recognition,
these financial liabilities are measured at amortised costs using
the effective interest method.
The Group initially recognises debt securities issued and
subordinated liabilities on the date that they are originated. All
other financial liabilities (including liabilities designated as at
fair value through profit or loss) are recognised initially on
trade date, which is the date that the Group becomes a party to the
contractual provision of the instrument.
The Group derecognises a financial liability when the
contractual obligations are discharged, cancelled or expire.
Other financial liabilities comprise loans and borrowings, bank
overdrafts, and trade and other payables.
Bank overdrafts that are repayable on demand and form an
integral part of the Group's cash management are included as a
component of cash and cash equivalents for the purpose of the
statement of cash flows.
Borrowings
Interest-bearing bank loans and overdrafts are recorded at the
proceeds received, net of direct issue costs. Finance charges,
including premiums payable on settlement or redemption and direct
issue costs, are accounted for on an accrual basis to the profit or
lossusing the effective interest method and are added to the
carrying amount of the instrument to the extent that they are not
settled in the period in which they arise. The effective interest
method allocates the interest expense over the life of the
instrument so as to reflect a constant return on the carrying
amount of the liability.
Borrowings include a component of the Company's deferred
ordinary shares and preference shares in subsidiaries held by third
parties that fall under the definition of financial liabilities
under IAS 32.
3.5 Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of ordinary shares are
recognised as a deduction from equity, net of any tax effects.
Repurchase of share capital
When share capital recognised as equity is repurchased, the
amount of the consideration paid, which includes directly
attributable costs, net of any tax effects, is recognised as a
deduction from equity.
3.6 Impairment of non-financial assets
At each reporting date, the Group reviews the carrying amounts
of its tangible and intangible assets to determine whether there is
any indication that those assets have suffered an impairment loss.
If any such indication exists, an impairment loss is recognised for
the amount by which the asset's carrying amount exceeds its
recoverable amount if any. The recoverable amount is the higher of
an asset's fair value less costs to sell and value in use. For the
purposes of assessing impairment, intangible assets are grouped at
the lowest levels for which there are separately identifiable cash
flows (cash-generating units).
3.7 Inventories
Inventories are stated at the lower of cost and net realisable
value. Cost comprises direct materials and, where applicable,
direct labour costs and those overheads that have been incurred in
bringing the inventories to their present location and condition.
Cost is calculated using the first-in, first-out method. Net
realisable value represents the estimated selling price less all
estimated costs of completion and costs to be incurred in
marketing, selling and distribution.
3.8 Government grants
Government grants are recognised initially as deferred income at
fair value when there is reasonable assurance that they will be
received and the Group will comply with the conditions associated
with the grant. Grants that compensate the Group for expenses
incurred are recognised in profit or loss as other income on a
systematic basis in the same periods in which the expenses are
recognised. Grants that compensate the Group for the cost of an
asset are recognised in profit or loss on a systematic basis over
the useful life of the asset.
3.9 Revenue and expense recognition
Interest income is recognised on a time-proportionate basis
using the effective interest rate method.
Dividends receivable on equity and non-equity shares, which
carry significant equity rights, are recognised as revenue when the
shareholders' right to receive payment has been established,
normally ex-dividend date. When no ex-dividend date is available,
dividends receivable on or before the period end are treated as
revenue for the period. Provision is made for any dividends not
expected to be received.
Fixed returns on debt securities and loans are recognised on an
effective interest rate basis, which is the rate that exactly
discounts estimated future cash receipts through the expected life
of the financial asset to that asset's net carrying amount.
Revenue from gas sales is recognised upon delivery and passage
of title to the customer based on production as measured in cubic
feet.
Expenses are accounted for on an accrual basis. Expenses are
charged to the profit or loss. This includes expenses directly
related to making an investment which is held at fair value through
profit or loss.
3.10 Earnings per share
The Group presents basic and diluted earnings per share (EPS)
data for its ordinary shares. Basic EPS is calculated by dividing
the profit or loss attributable to ordinary shareholders of the
Company by the weighted average number of ordinary shares
outstanding during the period, adjusted for own shares held.
Diluted EPS is determined by adjusting the profit or loss
attributable to ordinary shareholders and the weighted average
number of ordinary shares outstanding, adjusted for own shares
held, for the effects of all dilutive potential ordinary shares,
which comprise convertible notes and share options granted to
employees.
3.11 Income tax expense
The Company received from the Governor-in-Cabinet of the Cayman
Islands, an undertaking that, for a period of 20 years from 5 June
2007 no laws of the Cayman Islands imposing any tax on profits,
income, gains or appreciation shall apply to the Company and that
no such tax or any tax in the nature of estate duty or inheritance
tax shall be payable on the shares, debentures or other obligations
of the Company. Under the current Cayman Islands law, no tax will
be charged on profits or gains of the Company and dividends of the
Company would be payable to Shareholders resident in or outside the
Cayman Islands without deduction of tax.
Tax arises in the consolidated financial statements from
taxation payable with respect to subsidiaries companies.
3.12 Future changes in accounting policies
IASB (International Accounting Standards Board) and IFRIC
(International Financial Reporting Interpretations Committee) have
issued the following standards and interpretations with an
effective date after the date of these financial statements:
New/Revised International Financial Reporting Effective date
Standards (IAS/IFRS) (accounting periods
commencing on
or after)
-------------------------------------------------------- ---------------------
IAS 1 Presentation of Financial Statements - Amendments 1 July 2012
to revise the way other comprehensive income is
presented (June 2011)
IAS 12 Income Taxes - Limited scope amendment
(recovery of underlying assets) (December 2010) 1 January 2012
IAS 19 Employee Benefits - Amendment resulting
from the Post-Employment Benefits and Termination 1 January 2013
Benefits projects (as amended in June 2011)
IAS 27 Consolidated and Separate Financial Statements 1 January 2013
- Reissued as IAS 27 Separate Financial Statements
(as amended in May 2011)
IAS 28 Investments in Associates - Reissued as 1 January 2013
IAS 28 Investments in Associates and Joint Ventures
(as amended in May 2011)
IAS 32 Financial Instruments Presentation - Amendments 1 January 2014
to application guidance on the offsetting of financial
assets and financial liabilities (December 2011)
IFRS 7 Financial Instruments: Disclosures - Amendments 1 January 2013
enhancing disclosures about offsetting of financial
assets and financial liabilities (December 2011)
IFRS 7 Financial Instruments: Disclosures - Amendments 1 January 2015
requiring disclosures about the initial applicable
of IFRS 9 (December 2011)
IFRS 9 Financial Instruments - Classification 1 January 2015
and measurement of financial assets (as amended
in December 2011)
IFRS 9 Financial Instruments - Accounting for 1 January 2015
financial liabilities and derecognition (as amended
in December 2011)
IFRS 10 Consolidated Financial Statements (May 1 January 2013
2011)
IFRS 11 Joint Arrangements (May 2011) 1 January 2013
IFRS 12 Disclosure of Interests in Other Entities 1 January 2013
(May 2011)
IFRS 13 Fair Value Measurement (May 2011) 1 January 2013
-------------------------------------------------------- ---------------------
IFRIC Interpretation
IFRIC 20 Stripping Costs in the Production Phase 1 January 2013
of a Surface Mine
-------------------------------------------------------- ---------------------
The Directors do not expect the adoption of the standards and
interpretations to have a material impact on the Group's financial
statements in the period of initial application.
4 Segment information
The Group operates in one business and geographic segment, being
investment in clean energy companies and projects predominantly in
North America.
5 Financial risk management
The Group's activities expose it to a variety of financial
risks: market risk (including currency risk, market price risk and
interest rate risk), credit risk and liquidity risk.
Market price risk
The project companies in which the Group invests operate in
sectors that may be affected by the prevailing prices of
electricity, oil, natural gas and other commodities. As energy and
fuels derived from non-renewable sources become more expensive or
scarce, renewable energy and alternative fuels become more
valuable. Conversely, if non-renewable energy and fuels become more
abundant or, for other reasons become less expensive, the value of
renewable or alternative fuels and energy may be negatively
affected. As a result, the performance of the project companies is
likely to be dependent upon prevailing prices for these
commodities, which have been historically, and may continue to be,
volatile and subject to wide variations for a variety of reasons
beyond the control of the Group. These factors include the level of
consumer product demand, weather conditions, governmental
regulations in producing and consuming countries, the price and
availability of alternative fuels, the supply of oil and natural
gas, and overall geo-political and economic conditions. Therefore,
volatility of commodity prices may adversely affect the value of
the Group's investments.
Market price risk is managed by the management team, in
accordance with parameters set by the Board.
All of the Group's investments comprise interests in companies
which are not publicly traded or freely marketable. The Group may
also be restricted from selling certain securities by contract or
regulatory considerations. Such investments may therefore be
difficult to value or realise. Any such realisation may involve
significant time and expense.
If the value of the Group's investment portfolio
increased/decreased by 5%, the net assets of the Group would
increase/decrease by US$5,579,042 (2011: US$6,571,200)
Foreign exchange risk
The Group is exposed to foreign exchange risk with regard to
transactions made in Sterling and balances held in Sterling.
An analysis of net assets by currency exposure as at 30 June
2012 is as follows:
Foreign exchange risk (continued)
Net Assets Net Assets
US$'000s US$'000s
30 June 2012 30 June 2011
------------ ------------- -------------
US Dollars 173,074 211,881
Sterling 106 (168)
------------ ------------- -------------
Total 173,180 211,713
------------ ------------- -------------
An appreciation of the Sterling against the US Dollar of 5%
would have decreased net assets by US$5,034 (2011: US$5,232). A
decrease of 5% would have an equal and opposite effect.
Interest rate risk
The Group is exposed to cash flow interest rate risk on cash
balances which are all short term fixed deposits. The weighted
average interest rates on short term fixed deposits as at 30 June
2012 were:
30 June 2012 30 June 2011
% %
--------------- ------------- -------------
Cash balances
US Dollars 0.15 0.05
Sterling - -
Interest rate risk (continued)
The table below summarises the Group's exposure to interest rate
risks. It includes the Groups' financial assets and liabilities at
the earlier of contractual re-pricing or maturity date, measured by
the carrying values of assets and liabilities:
30 June 2012 Less 1-3 months 3 months 1-5 years Over Non-interest Total
than to 1 5 bearing
1month year years
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Financial Assets
Financial assets
at fair value
through profit
or loss - - - - - 110,171 110,171
Trade and other
receivables 18 - - - - 6,465 6,483
Cash and cash
equivalents 35,026 - 96 - - 13,979 49,101
------------------------- --------- ----------- ---------- ----------- ----------- ------------- ---------
Total financial
assets 35,044 - 96 - - 130,615 165,755
Financial Liabilities
Trade and other
payables - - - - - (3,185) (3,185)
Loans and borrowings - - (2,687) (18,188) (15,555)) - (36,430)
Total financial
liabilities - - (2,687) (18,188) (15,555) (3,185) (39,615)
------------------------- --------- ----------- ---------- ----------- ----------- ------------- ---------
Total interest
rate sensitivity
gap 35,044 - (2,591) (18,188) (15,555)
------------------------- --------- ----------- ---------- ----------- ----------- ------------- ---------
30 June 2011 Less 1-3 months 3 months 1-5 years Over Non-interest Total
than to 1 5 bearing
1month year Years
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Financial Assets
Financial assets
at fair value
through profit
or loss - - - - - 131,424 131,424
Trade and other
receivables - - 3,050 - - 5,133 8,183
Cash and cash
equivalents 45,173 - 1,449 - - - 46,622
----------------------- --------- ----------- --------- ----------- ---------- ------------- ---------
Total financial
assets 45,173 - 4,499 - - 136,557 186,229
Financial Liabilities
Trade and other
payables - - - - - (2,541) (2,541)
Loans and borrowings - - (2,840) (18,855) (9,239) - (30,934)
Total financial
liabilities - - (2,840) (18,855) (9,239) (2,541) (33,475)
----------------------- --------- ----------- --------- ----------- ---------- ------------- ---------
Total interest
rate sensitivity
gap 45,173 - 1,659 (18,855) (9,239)
----------------------- --------- ----------- --------- ----------- ---------- ------------- ---------
No fair value interest rate sensitivity analysis has been
provided as no financial assets or liabilities are subject to fair
value interest rate risk. If interest rates have been 1%
higher/lower for the year, interest receivable would have been
US$5,788 (2011: US$187,380) higher/lower.
Credit risk
Credit risk is the risk that counterparty to a financial
instrument will fail to discharge an obligation or commitment that
it has entered into with the Group.
The carrying amounts of financial assets best represent the
maximum credit risk exposure at the consolidated statement of
financial position date. This relates also to financial assets
carried at amortised cost, as they have a short term maturity.
At the reporting date, the Group's financial assets exposed to
credit risk amounted to the following:
30 June 2012 30 June 2011
US$'000 US$'000
----------------------------------------------- --------------- ---------------
Financial assets at fair value through profit
or loss 110,171 131,424
Trade and other receivables 6,483 8,183
Cash and cash equivalents 49,101 46,622
165,755 186,229
----------------------------------------------- --------------- ---------------
The maximum exposure to credit risk is represented by the
carrying amount of each financial asset in the statement of
financial position. Management does not expect any counterparty to
fail to meet its obligations. No impairment provisions had been
made as at the year end and no debtors were past their due
date.
Cash balances are held with P-1* financial institutions.
*- A Moody's rating of Prime-1 (P-1) means that the issuer has a
superior ability to repay short-term debt for the obligations.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as they fall due. The Group's
approach to managing liquidity is to ensure, as far as possible,
that it will have sufficient liquidity to meet its liabilities when
they fall due, under both normal and stressed conditions, without
incurring unacceptable losses. The Group's liquidity position is
monitored by the management team and the Board of Directors.
Residual undiscounted contractual maturities of financial
liabilities:
30 June 2012 Less than 1-3 3 months 1-5 years Over 5 No stated
1 month months to 1 year years maturity
-------------------------- ---------- -------- ----------- ---------- --------- ----------
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Financial liabilities
Trade and other payables (3,185) - - - - -
Loans and borrowings - - (2,687) (18,188) (15,555) -
-------------------------- ---------- -------- ----------- ---------- --------- ----------
(3,185) - (2,687) (18,188) (15,555) -
-------------------------- ---------- -------- ----------- ---------- --------- ----------
30 June 2011 Less than 1-3 3 months 1-5 years Over 5 No stated
1 month months to 1 year years maturity
-------------------------- ---------- -------- ----------- ---------- -------- ----------
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Financial liabilities
Trade and other payables (2,541) - - - - -
Loans and borrowings - - (2,840) (18,855) (9,239) -
-------------------------- ---------- -------- ----------- ---------- -------- ----------
(2,541) - (2,840) (18,855) (9,239) -
-------------------------- ---------- -------- ----------- ---------- -------- ----------
Fair values
All financial assets and liabilities at 30 June 2012 are
considered to be stated at fair value or a reasonable approximation
to fair value.
6. Critical accounting estimates and assumptions
These disclosures supplement the commentary on financial risk
management (see note 5).
Key sources of estimation uncertainty
Determining fair values
The determination of fair values for financial assets for which
there is no observable market prices requires the use of valuation
techniques as described in accounting policy 3.5(i). For financial
instruments that trade infrequently and have little price
transparency, fair value is less objective, and requires varying
degrees of judgement depending on liquidity, concentration,
uncertainty of market factors, pricing assumptions and other risks
affecting the specific instrument. See also "Valuation of financial
instruments" below.
Critical judgements in applying the Company's accounting
policies
Critical judgements made in applying the Group's accounting
policies include:
Valuation of financial instruments
The Group's accounting policy on fair value measurements is
discussed in accounting policy 3.1. The Group measures fair value
using the following hierarchy that reflects the significance of
inputs used in making the measurements:
-- Level 1: Quoted market price (unadjusted) in an active market for an identical instrument.
-- Level 2: Valuation techniques based on observable inputs,
either directly (i.e., as prices) or indirectly (i.e., derived from
prices). This category includes instruments valued using: quoted
market prices in active markets for similar instruments: quoted
market prices for identical or similar instruments in markets that
are considered less than active; or other valuation techniques
where all significant inputs are directly or indirectly observable
from market data.
-- Level 3: Valuation techniques using significant unobservable
inputs. This category includes all instruments where the valuation
technique includes inputs not based on observable data and the
unobservable inputs have a significant effect on the instrument's
valuation. This category includes instruments that are valued based
on quoted prices for similar instruments where significant
unobservable adjustments or assumptions are required to reflect
differences between the instruments.
Fair values of financial assets and financial liabilities that
are traded in active markets are based on quoted market prices or
dealer price quotations. For all other financial instruments the
Group determines fair values using valuation techniques.
The Group holds full or partial ownership interests in a number
of unquoted clean energy companies. The Group's investments are
classified as level 3 in the fair value hierarchy. A reconciliation
from the beginning balances to the ending balances is shown in note
14.1.
7 Management service fees
Leaf's wholly-owned subsidiary, Leaf Clean Energy USA, LLC
("Leaf USA"), in Washington, DCprovides assets advisory, portfolio
management and certain administrative services to the Company. Leaf
USA is entitled to management fees which are calculated based on
20% mark up on the costs of the asset advisory and portfolio
management services provided to Leaf Clean Energy Company. The
administrative services provided to Leaf Clean Energy Company are
at cost base with nil mark up.
Leaf USA Service fees for the year ended 30 June 2012 payable to
Leaf USA were US$3,721,087 (year ended 30 June 2011: US$3,775,686)
and the amount accrued but not paid at the period end was
US$584,690 (30 June 2011: US$364,626). These fees are eliminated on
consolidation.
8 Other administration expenses
Year ended Year ended
30 June 2012 30 June 2011
US$'000 US$'000
Directors' remuneration (note 10) 1,248 1,069
Travel and subsistence expenses 289 259
Legal and professional fees (note 8.1) 228 715
Administration fees (note 8.2) 195 313
Directors' and Officers' insurance expense 97 106
Audit fees 89 99
Registrar fees and costs 44 48
Printing and stationery expenses 15 50
Other expenses 9 93
Total 2,214 2,752
-------------------------------------------- -------------- --------------
8.1 Legal and professional fees
Legal and professional fees represent legal, advisory and
consultancy fees incurred during and after the implementation of
investment acquisitions.
8.2 Administration fees
With effect from November 2009, the Company administrator is
entitled to an administration fee, payable quarterly in arrears and
calculated in respect of each quarter or other period with a
minimum fee of GBP25,000 per quarter at the rate of 0.1% per annum
where the total assets of the parent company less borrowings is
less than US$100,000,000; 0.09% where the total assets of the
Company less borrowings at the end of the relevant quarter is
greater than or equal to US$100,000,000 but less than
US$200,000,000; and at the rate of 0.08% per annum where the total
assets of the Company less borrowings at the end of the relevant
quarter is greater than or equal to US$200,000,000.
Administration fees for the year amounted to US$195,056 (2011:
US$312,840) and US$42,493 was outstanding as at 30 June 2012 (2011:
US$53,049).
9 Interest income and expense
9.1 Interest income on investments at fair value through profit or loss
The Group had US$1,837,199 (2011: US$4,949,564) of interest
income earned during the year from loans made by the parent company
to its portfolio companies, not including impairment of accrued
interest brought forward from prior periods. Of this, US$804,504
(2011: US$2,601,133) was from non-subsidiaries and is recognised in
profit or loss net of impairment of accrued interest brought
forward from prior periods in relation to such non subsidiaries.
US$1,032,695 (2011: US$2,348,431) was from Leaf's investment in
subsidiaries and was eliminated on consolidation.
9.2 Finance costs
Finance costs relate to cost of borrowing of underlying investee
companies (see note 21).
10 Directors' remuneration
In February 2011, Mercer Limited ("Mercer") was engaged to
conduct an independent remuneration review, and Mercer's
recommendation was adopted by the Board at its meeting on 3 March
2011. As recommended by Mercer, the basic annual remuneration for
the Chairman and the Executive Director was maintained at
US$200,000 and US$400,000 respectively. In addition, the Executive
Director is eligible to receive an annual bonus of US$350,000. The
Non-Executive Directors fees were reduced from US$150,000 to
US$60,000 with a US$2,500 fee for each board meeting attendance, a
US$10,000 fee for Audit Committee membership and a US$1,500 fee
reimbursement for each additional day attending the Company's
meetings.
Details of the Directors' basic annual remuneration during the
year were as follows:
Remuneration Remuneration Remuneration
for for the period for the period
year to from 1 April from 1 July
30 June 2012 2011 to 30 2010 to 31
June 2011 March 2011
US$'000 US$'000 US$'000
Peter Tom (Chairman) 200 200 200
Bran Keogh 400 400 400
J. Curtis Moffatt 148 60 150
Peter O'Keefe 150 60 150
898 720 900
---------------------- -------------- ---------------- ----------------
Directors' fees and other expenses paid during the year were as
follows:
30 June 2012 Directors' fees Annual bonus Total
US$'000 US$'000 US$'000
Peter Tom (Chairman) 200 - 200
Bran Keogh 400 350 750
J. Curtis Moffatt 148 - 148
Peter O'Keefe 150 - 150
898 350 1,248
---------------------- ---------------- ------------- --------
30 June 2011 Directors' fees Other emoluments Total
US$'000 US$'000 US$'000
Peter Tom (Chairman) 200 - 200
Bran Keogh 400 175 575
J. Curtis Moffatt 143 - 143
Peter O'Keefe 151 - 151
894 175 1,069
---------------------- ---------------- ----------------- --------
The Directors are also entitled to receive reimbursement of any
expenses in relation to their appointment. Total reimbursement fees
paid to the Directors for the year ended 30 June 2012amounted to
US$218,230 (2011: US$216,750) of which US$nil was outstanding at 30
June 2012 (June 2011: US$nil).
11 Impairment of non-financial assets
Non-financial assets are assessed for impairment at each
reporting period end. This review is undertaken in conjunction with
the review of the Company's investment in each subsidiary.
Year ended Year ended
30 June 2012 30 June 2011
US$'000 US$'000
Goodwill (note 18) (9,801) (3,320)
Property, plant and equipment
(note 17) - (3,728)
------------------------------- -------------- --------------
Total (9,801) (7,048)
=============================== ============== ==============
12 Loss per share
Basic and Diluted
Basic and diluted loss per share is calculated by dividing the
loss attributable to equity holders of the Group by the weighted
average number of ordinary shares in issue during the year:
Year ended Year ended
30 June 2012 30 June 2011
Loss attributable to equity holders of the parent (US$'000) (34,005) (10,109)
Weighted average number of ordinary shares in issue (thousands) 130,720 142,649
----------------------------------------------------------------- --------------- ---------------
Basic and fully diluted loss per share (cents per share) (26.01) (7.10)
----------------------------------------------------------------- --------------- ---------------
There is no difference between the basic and diluted loss per
share for the year.
13 The subsidiaries
Since incorporation, for efficient portfolio management
purposes, the Company has established the following subsidiary
companies:
Country of Percentage of
incorporation shares held
------------------------------------- ---------------- --------------
Leaf Bioenergy Company Cayman Islands 100%
Leaf Biomass Company Cayman Islands 100%
Leaf Biomass Investments, Inc.* USA (Delaware) 100%
Leaf Clean Energy USA, LLC USA (Delaware) 100%
Leaf Escalona Company* Cayman Islands 100%
Leaf Hydro Company Cayman Islands 100%
Leaf Invenergy Company* Cayman Islands 100%
Leaf Invenergy US Investments, Inc* USA (Delaware) 100%
Leaf LFG Company Cayman Islands 100%
Leaf LFG US Investments, Inc.* USA (Delaware) 100%
Leaf MaxWest Company* USA (Delaware) 100%
Leaf Miasolé* Cayman Islands 100%
Leaf Skyfuels Company* Cayman Islands 100%
Leaf Solar Company Cayman Islands 100%
Leaf VREC* Cayman Islands 100%
Leaf Waste Energy Cayman Islands 100%
Leaf Wind Company Cayman Islands 100%
*Indirect subsidiaries
The Company also has control over the following underlying
investee companies:
Country of Principal activity Effective interest held
incorporation
--------------------------------- -------------------- -------------------- ------------------------
Energia Escalona Coopertief U.A Netherlands Hydro Energy 87.5%
Escalona B.V Netherlands Hydro Energy 87.5%
Energia Escalona I S.A. de C.V Mexico Hydro Energy 87.5%
Energia Escalona s.r.l. Mexico Hydro Energy 87.5%
Energentum S.A. de C.V Mexico Hydro Energy 86.6%
Johnstown Regional Energy LLC USA (Pennsylvania) Landfill Gas 100%
Multitrade Rabun Gap LLC USA (Virginia) Biomass 75%(1)
Multitrade Telogia LLC USA (Virginia) Biomass 61.25%(2)
Telogia Power LLC USA (Virginia) Biomass 61.25%(2)
--------------------------------- -------------------- -------------------- ------------------------
(1) Voting rights 81.9%
(2) Voting rights 66.25%
14 Investments
Investments comprise ordinary stock, loans and preferred stock
carrying a cumulative preferred dividend, preferential return of
capital and capped rights to share in profits. The Directors, with
advice from the inhouse management team, Leaf Clean Energy USA,
LLC, have reviewed the carrying value of each investment and
calculated the aggregate value of the Company's portfolio.
Investments are measured at the Directors' estimate of fair value
at the reporting date, in accordance with IAS 39 'Financial
Instruments: Recognition and measurement'.
14.1 Investments at fair value through profit or loss
30 June 2012 30 June 2011
US$'000 US$'000
--------------------------------------------- --------------- ---------------
Balance brought forward 131,424 80,676
Addition from deconsolidation of subsidiary - 23,843
Additional investments 4,800 26,155
Repayment of investments (10,000) -
Movement in fair value of investments (16,053) 750
Balance carried forward 110,171 131,424
--------------------------------------------- --------------- ---------------
Investments are stated at fair value through profit or loss on
initial recognition. Loans are stated at fair value in conjunction
with the related equity investment in the investee company. All
investee companies are unquoted.
14.2 Portfolio valuation methodology
Unquoted investments are valued by applying an appropriate
valuation technique, which makes maximum use of market-based
information, is consistent with models generally used by market
participants and is applied consistently from period to period,
except where a change would result in a better estimation of fair
value. The Company primarily invests in unquoted direct
investments. Unquoted direct investments have characteristics
similar to private equity investments, in that the value is
generally determined through the sale or flotation of the entire
business, rather than the sale of an individual instrument.
Valuations of such investments are based upon the "International
Private Equity and Venture Capital Valuation Guidelines."
The inhouse management team conducted a valuation analysis of
the Company's investment portfolio based upon standard valuation
approaches compatible with the "International Private Equity and
Venture Capital Valuation Guidelines." Given the uncertainties
inherent in estimating the fair value of unquoted direct
investments, a degree of caution was applied by the Asset Advisor
in exercising judgements and making the necessary estimates.
15 Trade and other receivables
30 June 2012 30 June 2011
US$'000 US$'000
Accounts receivable 4,044 3,129
Interest receivable 428 3,050
Prepayments 2,011 2,004
Total 6,483 8,183
--------------------- --------------- ---------------
16 Cash and cash equivalents
30 June 2012 30 June 2011
US$'000 US$'000
Short term fixed deposits 35,027 29,137
Bank current account balances 11,854 15,061
Restricted cash * 2,220 2,424
------------------------------- --------------- ---------------
Total 49,101 46,622
------------------------------- --------------- ---------------
* Restricted cash balance consists of a credit card cash
security of US$95,961. (2011: US$Nil)
In addition, certain Group subsidiaries held restricted cash
balances deposited with commercial banks in the aggregate amount of
US$2.1 million, which was required to comply with the terms of the
loan agreements with respect to these subsidiaries.
The short-term deposits are subject to interest rates at 0.12%
per annum and are fixed for periods ranging up to 1 month from the
balance sheet date.
17 Property, plant and equipment
30 June 2012 30 June
2011
Total Total
US$'000 US$'000
Cost
Opening balance 57,674 65,802
Additions 1,505 2,206
Deconsolidation of subsidiary - (3,562)
Impairment loss - -
-Current year - (3,728)
-Reclassification from pre-operating expenses - (1,099)
Property, plant and equipment grant reclassified - (1,830)
Disposals (307) (115)
-------------------------------------------------- ------------- ----------
Closing balance 58,872 57,674
-------------------------------------------------- ------------- ----------
Depreciation
Opening balance 12,660 8,332
Charge for the year 3,159 4,328
-------------------------------------------------- ------------- ----------
Closing balance 15,819 12,660
-------------------------------------------------- ------------- ----------
Carrying amounts 43,053 45,014
-------------------------------------------------- ------------- ----------
18 Intangible assets
Goodwill Other intangibles Total
US$'000 US$'000 US$'000
Cost
Balance as at 1 July 2011 16,237 2,249 18,486
Balance at 30 June 2012 16,237 2,249 18,486
------------------------------------ --------- ------------------ ---------
Amortisation and impairment losses
Balance as at 1 July 2011 (4,801) (261) (5,062)
Amortisation and disposal - (153) (153)
Impairment loss (9,801) - (9,801)
------------------------------------ --------- ------------------ ---------
Balance at 30 June 2012 (14,602) (414) (15,016)
------------------------------------ --------- ------------------ ---------
Carrying amounts
1 July 2011 11,436 1,988 13,424
30 June 2012 1,635 1,835 3,470
------------------------------------ --------- ------------------ ---------
Goodwill
Goodwill is not amortized but is evaluated for impairment by
management on 30 June of each year or whenever events or changes in
circumstances indicate that the carrying value may not be
recoverable. The impairment test for the years ended 30 June 2012
and 2011 was performed by determining the fair value of the Group's
investee companies using discounted cash flows valuation approach.
The valuations were based on both historical and projected
financial data, using reasonable assumptions. For the year ended 30
June 2012, management determined goodwill for the Group's investee
companies was impaired and recognised an impairment loss of
$9,801,000 (2011: US$3,320,000).
Other intangible assets
Other intangible assets comprise an Electric Power Purchase and
Sale agreement between Seminole Electric Cooperative and a Group
subsidiary, Multitrade Telogia LLC. The subsidiary agreed to sell
and Seminole Electric Cooperative agreed to buy power upon
commencement of commercial operations. The contract ends in
November 2023.
19 Share capital
Ordinary shares of GBP0.0001 Number of Share capital Share premium
each shares US$'000 US$'000
As at 30 June 2011 132,675,726 29 311,574
Repurchased during the year (3,930,000) (1) (4,765)
------------------------------ ------------ -------------- --------------
As at 30 June 2012 128,745,726 28 306,809
------------------------------ ------------ -------------- --------------
The authorised share capital of the Company is GBP25,000 divided
into 250 million Ordinary Shares of GBP0.0001 each.
Under the terms of the placement on 22 June 2007, the Company
issued 200,000,000 shares of GBP0.0001 each par value at a price of
GBP1 each. The difference between the issue price and the par value
was transferred to share premium account, net of share issue
expenses.
Share capital and premium received was translated to US Dollars
at the exchange rate prevailing at the date of receipt of the
proceeds.
The holders of ordinary shares are entitled to receive dividends
as declared from time to time and are entitled to one vote per
share at meetings of the Company. All shares rank equally with
regards to the Company's assets.
19 Share capital (continued)
During the year 3,930,000 shares were repurchased by the Company
leaving 128,745,726 shares in issue as at 30 June 2012. The shares
were repurchased in 3 tranches at an average price of 77.98 pence
per share for a total cost, including transaction costs, of
GBP3,086,097(US$4,766,063). The Company's share price has averaged
77 pence during the year.
The repurchases of the Company's shares are in line with its
capital management philosophy whereby the Board manages the
Company's affairs to achieve shareholder returns through capital
growth rather than income, and monitors the achievement of this
through growth in net asset value per share.
Capital management
The Board's policy is to maintain a strong capital base so as to
maintain investor, creditor and market confidence and to sustain
future development of the business. The Board manages the Company's
affairs to achieve shareholder returns through capital growth
rather than income, and monitors the achievement of this through
growth in net asset value per share.
Company capital comprises share capital, share premium and
reserves. The Company is not subject to externally imposed capital
requirements.
20 Trade and other payables
30 June 2012 30 June 2011
US$'000 US$'000
Creditors and accrued payables 2,700 2,419
Directors' fees payable * 377 -
Administration fees payable* 43 53
Audit fees payable * 65 69
Total 3,185 2,541
-------------------------------- --------------- ---------------
* These payables are accrued by the parent company.
21 Loans and borrowings
This note provides information about the contractual terms of
the Group's interest-bearing loans and borrowings, which are
measured at amortised cost. For more information about the Group's
exposure to interest rate, foreign currency and liquidity risk (see
note 5).
Non-current liabilities
30 June 2012 30 June 2011
US$'000 US$'000
Promissory notes payable 33,368 27,722
Finance lease liabilities 375 372
Total 33,743 28,094
=========================== =============== ===============
Current liabilities
30 June 2012 30 June 2011
US$'000 US$'000
Promissory notes payable 2,386 2,746
Finance lease liabilities 301 94
Total 2,687 2,840
=========================== =============== ===============
21 Loans and borrowings (continued)
Long term debt includes:
(i) a promissory note in the original principal amount of
US$8,200,000 executed by a Group subsidiary to finance the
construction of a methane recovery project secured by a mortgage
and security interest in all the assets of that project and the
note is payable over 180 months, which began in October 2006. The
current interest rate on this note is 4.65% per year. The note
places certain restrictions on the Group subsidiary along with the
pledge of most of the assets and income. The promissory note
balance as at 30 June 2012 was US$7.1million (2011:
US$7.9million).
(ii) a promissory note in the original principal amount of
US$20,701,000 through the Rural Utilities Service (RUS), an agency
of the U.S. Department of Agriculture, executed by a Group
subsidiary as long term financing for its biomass power plant.
Repayment began on 31 December 2010 and is payable over 19 years.
Interest is payable quarterly at a rate of 3.247% per annum. The
note places certain restrictions on the Group subsidiary along with
the pledge of most of the assets and income. The promissory note
balance was US$18.7 million as at 30 June 2012 (2011: US$19.3
million)
(iii) a promissory note in the original principal amount of
US$6,500,000 from a commercial bank, executed by a Group subsidiary
as long term financing for its biomass power plant. The note has a
guarantee from the U.S. Department of Agriculture, a 20 year term
ending on 1 September 2031, and a current interest rate equal to
6.0%. The note places certain restrictions on the Group subsidiary
along with the pledge of most of the assets and income. The
promissory note balance was US$6.3 million as at 30 June 2012
(2011: US$nil)
(iv) the balance of other long term promissory notes was US$1.2m
(2011: US$0.4 million).
22 Related party transactions
Parties are considered to be related if one party has the
ability to control the other party or to exercise significant
influence over the other party in making financial or operational
decisions.
The former Asset Advisor, the Company administrator and the
Directors are considered related parties due to the significance of
the contracts with these parties. Details of the fee arrangements
with these parties are given in note 8.2 and 10.
23 Capital commitments
As at 30 June 2012, there were no capital commitments in respect
of investments.
24 Exchange rates
The following exchange rates were used to translate assets and
liabilities into the reporting currency at 30 June 2012:
GBP Sterling to US$ 1.5685 (2011: 1.6054)
25 Conversion to US GAAP
If the consolidated financial statements had been prepared under
US Generally Accepted Accounting Principles instead of
International Financial Reporting Standards, the net assets would
have been US$181,808,000 instead of US$173,180,000 as stated. The
difference arises due to the consolidation of controlled portfolio
companies in the IFRS financial statements. If US GAAP had been
prepared. those subsidiaries would not have been consolidated, but
would have been instead stated at fair value.
26 Subsequent events
On 20 July 2012, Leaf announced that it had made a $5 million
equity investment in Lehigh Technologies, Inc.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR FFEFWEFESEIF
Leaf Clean Energy (LSE:LEAF)
Historical Stock Chart
From Jun 2024 to Jul 2024
Leaf Clean Energy (LSE:LEAF)
Historical Stock Chart
From Jul 2023 to Jul 2024
